Form 4: Gulf Hungary Adjusts Quaker Chemical Stake via VPFs

Gulf Hungary Holding Korlatolt Felelossegu Tarsasag, a 10% owner of Quaker Chemical Corp, amended existing and entered into new variable prepaid forward sale contracts involving 343,500 shares.

Summary

• Gulf Hungary Holding Korlatolt Felelossegu Tarsasag, through its wholly-owned subsidiary QH Hungary Holdings Limited, engaged in significant derivative transactions involving Quaker Chemical Corp common stock.
• On November 25, 2025, two existing variable prepaid forward sale contracts (VPFs) with Citibank N.A. and Royal Bank of Canada (RBC) were amended and restated.
• The amended Citi VPF No. 8 was reduced to cover a maximum aggregate of 192,200 shares, and QH Hungary paid Citibank $3,246,816 and delivered 45,000 shares.
• The amended RBC VPF No. 5 was reduced to cover a maximum aggregate of 128,133 shares, and QH Hungary paid RBC $2,164,547 and delivered 30,000 shares.
• Two new VPFs were entered into on November 25, 2025: Citi VPF No. 10 covering 13,900 shares and RBC VPF No. 7 covering 9,267 shares.
• For the new Citi VPF No. 10, QH Hungary received $1,699,801 from Citibank.
• For the new RBC VPF No. 7, QH Hungary received $1,133,241 from RBC.
• The total maximum aggregate shares covered by all VPFs after these transactions is 343,500.
• The settlement for all VPFs is scheduled between November 29, 2027, and January 3, 2028, with a Forward Floor Price of $139.28 per share and a Forward Cap Price of $153.21 per share.
• Gulf Hungary directly holds 5,017 shares of Quaker Chemical common stock, in addition to the indirect beneficial ownership through QH Hungary Holdings Limited.

Sentiment

Score: 6

Explanation: The transactions represent a strategic financial engineering move by a significant shareholder to adjust exposure and potentially raise capital. While new VPFs provided immediate cash, the amendments to existing VPFs involved a net cash outflow and delivery of shares. The overall impact is complex, balancing liquidity, risk management, and potential future share delivery obligations, without a clear positive or negative signal for the issuer's operational performance.

Positives

• QH Hungary received $2,833,042 in cash from the new VPFs, providing immediate liquidity.
• The VPF structure allows QH Hungary to potentially retain upside participation in Quaker Chemical shares up to the Forward Cap Price of $153.21, while managing downside exposure.

Negatives

• QH Hungary paid out a total of $5,411,363 and delivered 75,000 shares in connection with amending and restating the existing VPFs.
• The transactions resulted in a net cash outflow of $2,578,321 for QH Hungary when combining the cash paid for amended VPFs and cash received for new VPFs.
• The delivery of 75,000 shares reduced the indirect beneficial ownership of common stock by QH Hungary Holdings Limited.
• The VPFs cap the full upside participation in the shares if the settlement price exceeds $153.21 per share.

Risks

• The reporting person's beneficial ownership of Quaker Chemical Corp common stock is subject to the terms of complex variable prepaid forward sale contracts, which involve obligations to deliver shares or cash based on future market prices.
• The ultimate number of shares or cash to be delivered under the VPFs depends on the volume-weighted average price of Quaker Chemical shares on specified valuation dates between November 29, 2027, and January 3, 2028.
• The VPFs introduce a cap on the full upside potential of the underlying shares if the Settlement Price is greater than the Forward Cap Price of $153.21 per share.

Future Outlook

The VPFs are structured to settle between November 29, 2027, and January 3, 2028, indicating a long-term view on the underlying Quaker Chemical Corp shares by Gulf Hungary, with defined parameters for future share or cash delivery based on market prices at that time.

Management Comments

• The transactions were made pursuant to a contract, instruction or written plan for the purchase or sale of equity securities of the issuer that is intended to satisfy the affirmative defense conditions of Rule 10b5-1(c).

Industry Context

These types of variable prepaid forward sale contracts are common among large shareholders seeking to monetize a portion of their equity holdings, manage risk, or raise capital without immediately selling shares outright. They allow the holder to retain some exposure to potential share price appreciation while locking in a minimum value or receiving upfront cash. The specific terms reflect current market conditions and the issuer's stock volatility.

Comparison to Industry Standards

• NA

Stakeholder Impact

• Shareholders: The transactions by a 10% owner could be interpreted as a strategic adjustment of their long-term position, potentially signaling a desire to manage risk or monetize a portion of their holdings without a full divestment. The delivery of 75,000 shares to the banks reduces the indirect beneficial ownership of common stock by QH Hungary Holdings Limited.
• Company (Quaker Chemical Corp): The transactions do not directly impact the company's operations or financial performance, but reflect a significant shareholder's financial strategy regarding its stake.

Next Steps

• Settlement of the variable prepaid forward sale contracts will occur between November 29, 2027, and January 3, 2028, based on the market price of Quaker Chemical Corp common stock at that time.

Key Dates

Keywords

Quaker Chemical Corp, KWR, SEC Form 4, Variable Prepaid Forward Sale Contract, VPF, Derivative Securities, Beneficial Ownership, Equity Financing, Gulf Hungary Holding, Citibank, Royal Bank of Canada