Debt-Laden German aluminium producer Almatis has filed for chapter 11 bankruptcy protection in the US after rejecting a refinancing proposal from its owner Dubai International Capital.
The filing has possibly paved the way for Oaktree Capital Management, Almatis' biggest debtor, to seize control of the company.
Dubai International Capital (DIC) which is owned by the ruler of Dubai, Sheikh Mohammed bin Rashid Al Maktoum, was reported last Wednesday as having managed to secure under-writing for $685 million worth of Almatis' debt refinancing, a plan that was then rejected by the company.
Oaktree had previously moved at a March 10 meeting with Almatis' creditors to put the firm under bankruptcy protection and claim a majority stake. Its proposal to take over the company gained momentum after Almatis failed to meet $40 million worth of obligations due to the impact of the financial crisis.
"Implementing the proposed debt restructuring plan through the Chapter 11 filing provides Almatis with an orderly process that allows us to address the necessary balance sheet restructuring," said Remco de Jon, the chief executive officer at Almatis said yesterday.
Almatis, which has liabilities estim-ated at $1 billion, also said that it has approximately $85 million of available cash to meet operating expenses.
DIC yesterday expressed its dismay at bankruptcy protection filing and was quoted as saying: "It is extraordinary and inexplicable that Almatis has filed for Chapter 11 bankruptcy only one week after soliciting lenders' consent."
Dubai International Capital also said that it urges Almatis' management to reconsider this "damaging course of action".
© 7Days 2010
