Oaktree Set to Take Over Almatis in Debt-Equity Swap (Update1)
March 11, 2010, 5:10 AM EST(Adds loan prices in fifth paragraph.)
By Patricia Kuo
March 11 (Bloomberg) -- Oaktree Capital Management LLC, the investment fund with about $73 billion under management, is set to take control of Almatis from Dubai International Capital LLC under the terms of a $1 billion debt restructuring.
The plan, which has been approved by two thirds of the Frankfurt-based company’s senior lenders, will allow Almatis to cut its debt to about $420 million and seek protection from creditors under Chapter 11 bankruptcy, according to the presentation.
Almatis said in a statement yesterday that it’s “pleased that a consensus has been reached by a majority of its senior lenders and is presently considering its response to this development.”
The company’s senior loans were quoted at between 76 percent and 78 percent of face value today, up from 72 percent to 74 percent on March 8, according to Cantor Fitzgerald prices.
Banks including UBS AG and Bahrain-based Arab Banking Corp. helped finance Almatis’s buyout in 2007 with $970 million of loans, including $235 million in junior debt. The company breached terms of the loans in the first half of last year as the global economic slowdown hurt demand for its products.
Dubai International Capital, the state-owned investment company that bought the alumina maker for an undisclosed amount in 2007, won’t recover its investment in Almatis unless it’s sold, according to the presentation, which was sent to senior lenders by their adviser, N.M. Rothschild & Sons Ltd., yesterday.
Junior lenders may recoup some of their money if the company is later sold for $325 million or more, according to the presentation.
Fiona Mulcahy, a London-based spokeswoman for Dubai International, declined to comment. An official at Oaktree Capital, which was founded in 1995, also declined to comment.
--Editors: Cecile Gutscher, Chapin Wright
To contact the reporter on this story: Patricia Kuo in London at pkuo2@bloomberg.net
To contact the editor responsible for this story: Paul Armstrong at Parmstrong10@bloomberg.net
