Oaktree Fights DIC Plan for Almatis

(Reuters) Oaktree Capital, a senior debtholder in German aluminum company Almatis, ratcheted up its fight against Almatis’s equity owner, Dubai International Capital, over the best way to restructure the bankrupt company, according to court documents.

Oaktree objected to Almatis’ continued use of cash collateral, which companies need to cover operating costs and other expenses while in bankruptcy.

Oaktree also said it is in talks with Almatis on an alternative restructuring plan.

Oaktree, a major investor in financially hobbled companies, helped develop Almatis’ original restructuring plan, which was abandoned last week when Almatis inked a replacement financing deal with Dubai International Capital LLC [DUBAHP.UL].

Under the new plan, Dubai International plans to pay off the company’s senior debt in full. Dubai International took the company private in a leveraged buyout in 2007.

Oaktree said it is concerned that the Dubai International plan overvalues Almatis and will leave the company with too much debt, according to court documents filed on Thursday.

Oaktree, which said it holds $300 million of Almatis’ senior debt, or 46 percent of the total, said it may object to the Dubai-backed plan and oppose its approval by the court.

Oaktree said its initial approval of Almatis’ use of the cash that is collateral for its senior secured debt was based on the initial restructuring plan, which was arranged before the company filed for bankruptcy. (Reporting by Caroline Humer; editing by John Wallace)