Dubai's DIC, Almatis' mezzanine lenders in revamp bid

zoom

NEW PROPOSAL: The proposal from mezzanine lenders - including Alcentra, Babson, North Western Mutual and Permira - and DIC, will not involve write-downs for senior lenders. (Google Images)

Mezzanine lenders to German alumina products manufacturer Almatis have teamed up with private equity sponsor Dubai International Capital and tabled a restructuring proposal, two sources said on Friday.

The new proposal counters an offer made by Almatis' senior lenders around two weeks ago that included a possible Chapter 11 filing and a pre-pack sale among other options.

"A Chapter 11 restructuring has been proposed and different parties do or don't want it to go that route," an investor said.

The proposal from mezzanine lenders - including Alcentra, Babson, North Western Mutual and Permira - and DIC, will not involve write-downs for senior lenders and is designed to avoid a Chapter 11 filing, another source said.

A spokesperson for Almatis declined to comment.

The mezzanine lenders and DIC's joint offer requires approval from two thirds of senior creditors and minor changes to the senior loan agreements, the same source said.

The company's senior lenders - including UBS, Commerzbank, SMBC and investors Harbourmaster Capital and Carlyle Group-- made a restructuring bid two weeks ago with Almatis's backing.

The senior lenders are currently talking to distressed investor Oaktree Capital and lender Goldman Sachs, which have built up a blocking stake in the company's debt, bankers said.

The value of Almatis' senior debt fell on Friday after the mezzanine proposal. Average bids on the euro-denominated term loan B tranche dropped to 64.1 percent of face value from 64.6 percent the week before, while the euro denominated mezzanine tranche was unchanged at 12 percent of face value, according to Thomson Reuters LPC data. (Reuters)

Almatis is also expected to secure an extension to its standstill agreement - which expires on October 2 - for another week or two. The company secured a standstill agreement from its lenders in June after the metals industry suffered a sharp drop off in sales amid the credit crunch.

Distressed investor Oaktree made an initial bid to take control of Almatis in July with DIC which fell apart in August after it was deemed too aggressive by some lenders, sources said.

Almatis was acquired by DIC in 2007, backed with a $970m loan arranged by UBS and Arab Banking Corporation, according to Thomson Reuters LPC data. (Reuters)

Print | Email | Discuss this article

| Share |

READERS' COMMENTS

Click here to post a comment

Add your Comment All posts are sent to the administrator for review and are published only after approval. ArabianBusiness.com reserves the right to remove any comment at any time for any reason. Please keep your responses appropriate and on topic. Arabian Business would like to point out that only comments relevant to the story will be published. Any containing personal insults or inappropriate language will not be approved.
Name *
Remember me on this computer
Email *	(Your email address will not be published)
City
Country
Subject *
Comment *
Notify me of further comments
Enter the words above *
Please click post only once - your comment will not be published immediately.

MORE FROM ARABIANBUSINESS.COM