UPDATE 3-Almatis files for bankruptcy, rejects DIC proposal

* Lists estimated liabilities of more than $1 bln

* Says owner DIC’s refinance proposal not viable

* DIC calls Ch 11 filing “extraordinary and inexplicable”

* Almatis plans to cut bank debt to $414.6 mln
(Adds DIC response)

By Sakthi Prasad

BANGALORE, April 30 (BestGrowthStock) – Debt-laden German aluminium
firm Almatis B.V. filed for Chapter 11 protection in a U.S.
bankruptcy court, two days after its owner Dubai International
Capital [DUBAHP.UL] (DIC) urged the company’s lenders not to
rush into bankruptcy.

Almatis, which has rejected DIC’s earlier refinancing
proposal, said the primary aim of the bankruptcy plan is to
reduce the debt load, implement a workable capital and
corporate governance structure.

In an emailed response, DIC said it will vigorously dispute
the reorganization plan and the valuation put forward by
Almatis’ management in court. DIC said the company’s Chapter 11
filing was “extraordinary and inexplicable.”

“We fully intend to continue to pursue a refinancing of the
Almatis Group which more accurately and fairly reflects the
true value of the business and urge Almatis management to
reconsider this damaging course of action,” DIC said.

In court filings, Almatis listed estimated assets in the
range of $500 million to $1 billion and estimated liabilities
of above $1 billion.

As per the restructuring plan, the aggregate bank debt will
be reduced to $414.6 million from the current $1.04 billion,
the company said in court papers.

Almatis was acquired by DIC through a leveraged buyout and
has been in restructuring talks for several months as it seeks
to cope with the huge debt load.

DIC’s refinancing proposal would have prevented distressed
debt investor Oaktree Capital [OAKCP.UL] in a bid to take over
Almatis.

Currently, Oaktree Capital holds about 46 percent of the
company’s debt and has a claim of about $310.6 million.

The equity of the reorganized company will be owned by the
Senior Lenders, including Oaktree Capital, the filings showed.

DIC PROPOSAL REJECTED

In a filing early on Friday, Almatis said DIC’s proposal
did not amount to a sufficiently credible and viable
alternative restructuring option.

In its refinancing proposal, DIC provided no evidence of
its financial ability to provide $100 million in new equity or
$25 million revolving line of credit has been committed to by
the financial institutions, Almatis said.

Almatis also questioned DIC’s proposal saying even if
funding were available, it was doubtful if the company would
have sufficient remaining cash to operate its business and
commence necessary capital projects.

On April 28, Dubai International Capital had urged Almatis
lenders 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. [ID:nLDE63R2MZ]

In its latest filing, Almatis said Oaktree and members of
the Senior Coordinating Committee had voted to accept the
bankruptcy plan.

Also, Almatis said it will negotiate and enter into a
debtor-in-possession credit facility.

Almatis, incorporated in the Netherlands, has production
facilities in China, Germany, India, Japan, the Netherlands,
and the United States.

The case is In re: Almatis B.V., U.S. Bankruptcy Court,
Southern District of New York, No. 10-12308.

Stock Basics
(Additional reporting by Santosh Nadgir; Editing by Jon
Loades-Carter, Jarshad Kakkrakandy)

UPDATE 3-Almatis files for bankruptcy, rejects DIC proposal