Oaktree Capital Management filed an objection to a debt restructuring plan for German alumina-products maker Almatis as it wrestles for control of the company, according to court documents.
The proposal from shareholder Dubai International Capital “will saddle the business with too much debt and excessive cash interest charges,” Los Angeles-based Oaktree said in the filing to the US Bankruptcy Court for the Southern District of New York yesterday.
It “raises questions not only about the debtors’ long-term viability, but the feasibility of the plan in the short-term as well.”
Oaktree, Almatis’s largest senior lender, also said it started talks with the company for a revised restructuring proposal that would cut its debt to a “significantly lower level” and provide junior lenders with better recoveries.
Oaktree holds about $300m, or 46 percent of Almatis’s senior debt, it said in the filings. The Frankfurt- based company sought Chapter 11 bankruptcy protection from creditors in April.
Almatis last week filed a motion in support of Dubai’s proposal, which will repay senior creditors in full while junior lenders swap their debt for less than 50 percent of shares.
Almatis defaulted on $40m of debt in June 2009 after the economic downturn sapped demand for its products. The company’s revenue is projected to rise to $534m this year from $400m last year.
Dubai International paid about $1.2bn for Almatis in 2007, using debt $970m of loans underwritten by banks including UBS AG and Bahrain-based Arab Banking Corp., Bloomberg data show. (Bloomberg)
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