Aleris European term lenders get subscription rights under settlement

By Caroline Salls

Pittsburgh, May 3 - Aleris International, Inc. has entered into a settlement agreement with holders of some of its European term loan claims in connection with the company's pending plan of reorganization, according to a company news release.

As a result of the settlement, these creditors now support the plan. Aleris said the plan backstop parties have also agreed to the terms of the settlement.

Under the settlement, the holders of the European term loan claims, other than the backstop parties, that exercise subscription rights will receive the right to subscribe for $50 million of ADH term loan subscription rights after taking into consideration a maximum third-party reduction.

In addition, Aleris said the agreement provides for changes to proposed stockholders and registration rights agreement that will be entered into in connection with the plan. The company said the changes enhance the rights of shareholders of the holding company that will indirectly own the assets of Aleris and its reorganized debtors following the plan effective date.

The voting deadline for holders of ADH class 3 claims was extended to May 4 from April 29, according to the release.

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

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