Oaktree Capital teams up with Dubai International Capital to keep hold of Almatis

US distressed debt specialist Oaktree Capital has stepped in to try and help Dubai International Capital secure control of its German aluminium producer, Almatis, through a debt restructuring, the Financial Times reports. According to the report, Oaktree and sovereign wealth fund DIC announced yesterday that they will work together on a restructuring plan to underwrite a cash injection and reduce the company’s debt, currently around $1bn. They said the move would allow them to “take advantage of current opportunities and to maximise long-term growth prospects.” DIC chief executive Sameer Al Ansari said in a statement that the fund was still committed to Almatis and did not want to sell it. Oaktree is said to have been buying up Almatis’ debt, making it now one of the company’s largest lenders. The pair, which reportedly described themselves as a “partnership”, is expected to put a finalised debt restructuring proposal to the aluminium business and its lenders in the next few weeks. Yesterday’s statement follows Almatis’ announcement that it would not make the June interest payment on its debt. Creditors agreed to a standstill last week, and the company now has until mid-August to conclude its debt restructuring plans. A number of trade buyers and private equity firms including Blackstone and Advent International have reportedly expressed interest in providing new financing to Almatis; however, sources told the FT that an auction for the aluminum company would still go ahead. Indicative bids are due next week and DIC and Oaktree will reportedly not take part. Frankfurt-based Almatis produces specialist alumina products for refractory, ceramics and polishing applications, flame retardants, cast polymers and paper applications. The company spun out from aluminium production giant Alcoa in 2004 and was acquired by DIC in 2007 for $1.2bn. source:www.altassets.com