LONDON (Reuters) – Privately-owned German alumina products manufacturer Almatis and its lenders have begun debt restructuring talks, three sources close to the talks said on Thursday.
The group, which is headquartered in Frankfurt, has meanwhile secured a waiver on requirements to provide audited accounts for this year, the sources added.
“The waiver marks the beginning of restructuring talks, there are lots of moving pieces still,” a banker close to the talks said.
Almatis was acquired by Dubai International Capital (DIC) in 2007, backed by a $970 million loan arranged by UBS and Arab Banking Corporation, according to Thomson Reuters LPC data.
The company is also expected to secure a standstill agreement next week, the sources said, under which creditors agree not to take action against the company.
“I expect it to be accepted, to give enough time for everyone to get their heads around the liquidity situation,” the banker said. The company’s senior lenders have formed a steering committee which includes UBS (UBS.N)UBS.VX, Commerzbank (CBKG.DE), SMBC, and investors Harbourmaster Capital and Carlyle Group, according to the sources.
Almatis, which has hired Close Brothers as adviser, also appointed accountants KPMG to undertake a review of the business plan, the results of which are already with the lenders.
Close Brothers declined to comment.
Almatis has also appointed Rothschild as adviser and Allen & Overy as legal counsel, one of the sources said.
As part of a restructuring, Almatis faces options including an equity injection by sponsor DIC as part of a debt-for-equity swap.
During a recent lender presentation, DIC said it was prepared to commit further funds under the right circumstances, one of the sources said.
DIC declined to comment.
On the secondary market, the price of Almatis’s senior loans has improved over the last week, Thomson Reuters LPC data shows.
Indicative average bids on Almatis’s dollar-denominated term loan BC climbed to 38 percent of face value from 32.5 percent a week ago, while bids on the euro-denominated BC term loan were up to 37.87 from 35.75 in the same period, the data provider shows.
By Zaida Espana
(Additional reporting by Tom Freke; Editing by Rupert Winchester)