(Bloomberg) -- KKR & Co is handing over ownership of a distressed Swedish mattress maker to creditors as part of the company’s second debt restructuring in less than a year. 

A group of Hilding Anders International AB’s creditors are set to swap part of their debt for equity, and provide the company with €20 million ($21.9 million) to boost its cash coffers, according to documents prepared for a London hearing on Friday.

Hilding Anders is looking to implement the restructuring deal via a scheme of arrangement in an English court.

The company, whose ties to Russia had exacerbated its financial difficulties after the Kremlin’s invasion of Ukraine, is restructuring its debt for the second time in less than a year. It’s also the second time that KKR is losing a firm to creditors in Europe this year. Telepizza last month agreed on terms that included the private equity firm ceding control of the Spanish pizza chain it partly owned.

Hilding Anders had €300 million of term loans and €273 million of bonds ahead of this round of restructuring, according to the document. As part of the debt deal, the notes will be converted into a 100% equity stake in Hilding Anders, while the term loans will remain in place. The new money provided by the creditors will rank senior to the rest of the debt.

A spokesperson for KKR declined to comment on the story. 

Last year, Hilding Anders and its creditors agreed to partly convert its previous term loans into a new, longer-dated senior facility, and partly into bonds issued by its holding company with a payment-in-kind coupon.

Russia Sanctions 

Hilding Anders, which owns a 73% equity stake in Russian bed manufacturer Askona Group, hasn’t been receiving dividends from the unit as it was ring-fenced from the rest of the group amid sanctions-related red tape.

The latest restructuring plan via a scheme was preferable to an accelerated sales process as it would ensure better recovery for lenders, according to the document. That’s because the ownership of Askona limits the pool of potential buyers given Russia-related sanctions imposed in the UK, the EU and US, while any delay in selling would also worsen liquidity issues faced by the firm.

Creditors holding approximately 90% of the term loans and the notes have already signed a lock-up agreement with Hilding, according to the document. The company is expecting to hold the meetings with creditors in regards with the scheme on July 10, and the sanction hearing on July 12. 

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