Aleris' disclosure statement is approved; confirmation hearing May 13

By Lisa Kerner

Charlotte, N.C., March 12 - Aleris International, Inc.'s disclosure statement was approved on Friday by the U.S. Bankruptcy Court in Delaware.

A confirmation hearing for the plan is scheduled for May 13.

Aleris and its co-debtor subsidiaries are positioned to emerge from Chapter 11 protection by mid-year, according to a company news release.

"With our operational improvements, combined with the new financial structure that will be in place upon emergence, we believe that we will be well-positioned to grow and continue building Aleris into a global aluminum enterprise for the long-term benefit of our customers, suppliers, business partners and employees," said Aleris chairman and chief executive officer Steven J. Demetriou.

As previously reported, creditor treatment under the plan includes:

• Holders of U.S. roll-up term loans, European roll-up loans and European term loans will have the option to receive cash or equity in Aleris and rights to participate in the rights offering for equity and notes;

• The reorganized company will emerge from bankruptcy as a privately held enterprise majority owned by existing creditors led by the backstop parties, which are the largest providers of the company's DIP term loan financing;

• All administrative expenses, including 503(b)(9) trade claims, will be paid in full;

• A convenience class will be created under which holders of unsecured claims other than debt claims of $10,000 or less can recover 25% or 50% of their allowed claims, depending on the amount of the 503(b)(9) administrative expenses paid;

• Holders of other general unsecured claims, including unsecured debt claims, will share in a $4 million cash pool;

• Aleris equity interests will be cancelled on the plan effective date with no distribution to holders; and

• Other U.S. equity interests and Aleris Deutschland equity interests will be reinstated.

The company said it will have a minimum of $233 million of liquidity through cash and an anticipated $500 million asset-backed revolving credit facility upon emergence.

Aleris, a Beachwood, Ohio-based producer of aluminum rolled products and extrusions, aluminum recycling and specification alloy, filed for bankruptcy on Feb. 12, 2009. Its Chapter 11 case number is 09-10478.

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