SCHEDULE 13D/A: Major Shareholder Amends Stake in Quaker Chemical Following Partial Settlement of Forward Contracts

Gulf Hungary Holding and its subsidiary QH Hungary Holdings Limited have updated their beneficial ownership in Quaker Chemical Corporation, reflecting a partial settlement of variable prepaid forward sale contracts.

Summary

• Gulf Hungary Holding Korlatolt Felelossegu Tarsasag (Gulf Hungary) and its wholly-owned subsidiary QH Hungary Holdings Limited (QH Hungary) filed Amendment No. 35 to their Schedule 13D regarding their beneficial ownership in Quaker Chemical Corporation.
• The filing reports a partial settlement of five existing variable prepaid forward sale contracts (VPFs) with Citibank N.A. and Royal Bank of Canada.
• On January 30, 2025, January 31, 2025, and February 3, 2025, QH Hungary delivered an aggregate of 17,997 shares of Quaker Chemical Common Stock to Citibank (3,043 shares per date) and RBC (2,956 shares per date) to settle portions of its VPF obligations.
• Following the partial settlement, QH Hungary directly beneficially owns 3,746,100 shares of Common Stock.
• Gulf Hungary indirectly beneficially owns the same 3,746,100 shares through QH Hungary and directly owns an additional 5,017 shares held in escrow.
• The total aggregate beneficial ownership for Gulf Hungary is 3,751,117 shares, representing approximately 21.1% of Quaker Chemical's outstanding Common Stock.
• The total aggregate beneficial ownership for QH Hungary is 3,746,100 shares, representing approximately 21.0% of Quaker Chemical's outstanding Common Stock.
• The percentages are based on 17,787,813 shares of Common Stock outstanding as of October 28, 2024, as reported in Quaker Chemical's Form 10-Q for the fiscal quarter ended September 30, 2024.
• A significant portion of QH Hungary's shares remain pledged as collateral: 2,123,167 shares to Citigroup Global Markets Inc. for a Margin Loan, 1,186,982 shares to Citibank N.A. for VPFs, and 435,951 shares to Royal Bank of Canada for VPFs.
• All 3,746,100 shares directly owned by QH Hungary remain subject to a Shareholder Agreement.

Sentiment

Score: 5

Explanation: The document is a factual, routine update on a significant shareholder's beneficial ownership and the settlement of pre-existing financial contracts. It contains no positive or negative operational news for Quaker Chemical Corporation itself, making the sentiment neutral.

Risks

• A substantial portion of the reporting persons' shares (3,746,100 shares) are pledged as collateral for various financial obligations, including a Margin Loan and Prepaid Variable Share Forward Transactions. This could expose the reporting persons to margin calls or further share deliveries if the stock price declines significantly.

Future Outlook

The document does not provide any forward-looking statements or guidance from Quaker Chemical Corporation. It details a past transaction by a significant shareholder related to pre-existing financial arrangements.

Management Comments

• The reporting persons, Gulf Hungary and QH Hungary, confirmed the partial settlement of existing variable prepaid forward sale contracts with Citibank and Royal Bank of Canada through the delivery of Quaker Chemical Common Stock.

Industry Context

This filing is a routine disclosure by a significant shareholder regarding changes in their beneficial ownership due to the settlement of financial instruments. It does not provide insights into Quaker Chemical Corporation's operational performance or broader industry trends, but rather reflects a large investor's ongoing management of its stake.

Related Party Transactions

• QH Hungary Holdings Limited is a wholly-owned subsidiary of Gulf Hungary Holding Korlatolt Felelossegu Tarsasag, establishing a related party relationship between the two reporting persons. Gulf Hungary's 5,017 shares are held in escrow to secure its indemnification obligations under a Share Purchase Agreement.

Stakeholder Impact

• Shareholders: Provides transparency on the ownership structure and financial arrangements of a major shareholder. The stability of a large shareholder's stake may be viewed positively.
• Reporting Persons (Gulf Hungary and QH Hungary): Directly impacted by the share deliveries to settle VPF obligations and the ongoing management of their pledged shares.
• Lenders (Citibank, Royal Bank of Canada): Involved as counterparties in the VPFs and as secured parties for pledged shares.

Next Steps

• The remaining portions of the variable prepaid forward sale contracts will have future settlement dates, though specific details or Quaker Chemical's involvement are not outlined in this filing.

Key Dates

Keywords

Quaker Chemical Corporation, Schedule 13D, beneficial ownership, variable prepaid forward, VPF, Gulf Hungary Holding, QH Hungary Holdings Limited, shareholding, SEC filing, Citibank, Royal Bank of Canada