DUBAI (Reuters) – Private equity fund Dubai International Capital (DIC) urged lenders to German aluminium firm Almatis not to rush to bankruptcy as it seeks a refinancing of its debt. In a letter to management and senior lenders to Almatis, DIC said a refinancing proposal it was leading was advanced and was a better option than the alternative of filing for Chapter 11.
The latter option would still allow DIC to pursue its refinancing, but would be a slower and more expensive process for all parties involved, it said. “Voting in favour of such a filing therefore severely jeopardises a full debt recovery to the detriment of each of your institutions,” the investment arm of Dubai’s ruler said in the letter.
“Almatis’ performance continues to improve month after month … As a result, no lender would be adversely affected by delaying a Chapter 11 filing and allowing the refinancing to progress,” it said.
Earlier in April, DIC said it would continue to seek a refinancing of Almatis’s debt, despite an adverse Dutch court decision.
A refinancing would prevent distressed debt investor Oaktree Capital [OAKCP.UL] from filing a U.S. Chapter 11 bankruptcy for Almatis in a bid to take over the German company which is weighed down by an estimated debt of about $1 billion.
Almatis, acquired by DIC via a leveraged buyout in 2008, has operations in Europe and the United States. (Reporting by Jason Benham; Editing by David Holmes)