Almatis: court approves disclosure statement, OKs Oaktree settlement

By Lisa Kerner

Charlotte, N.C., Aug. 23 - Almatis BV's disclosure statement was approved by the U.S. Bankruptcy Court for the Southern District of New York on Monday, according to an attorney close to the case.

The court also approved a related settlement with Oaktree Capital Management.

Almatis said previously it expects confirmation in late September.

Earlier in the month Almatis had withdrawn its prepackaged plan of reorganization and filed a new plan and disclosure statement earlier in the month.

As previously reported, Almatis received court approval on Aug. 3 to enter into a plan of reorganization support agreement with its largest equity holder, Dubai International Capital LLC, and Almatis' supporting pre-bankruptcy junior lenders, after opting out of its prepackaged plan support agreement.

Oaktree, the largest single holder of the group's senior debt, has agreed to support the new plan.

The new plan will result in the full repayment of Almatis' senior first-lien debt and also proposes enhanced distributions to the junior creditors.

Plan terms

Treatment of creditors will include:

• Holders of administrative claims, priority claims and senior lender claims will be paid in full in cash;

• Holders of second-lien claims will recover 0% to 90% through a share of a class-three distribution, including €52.1 million of senior paid-in-kind notes. If the notes are outstanding on the fifth anniversary of the effective date, noteholders will receive PIK preference warrants to purchase Almatis Topco 1 shares. The warrants would entitle the holder to buy up to 12.5% of the Almatis Topco 1 shares;

• Holders of mezzanine claims will recover 0% to 26% through a class-four distribution, consisting of 35.08% of the Almatis Topco 1 shares and mezzanine lender junior preference depository receipts. The receipts represent the beneficial rights to junior preference shares with a liquidation preference of $14.65 million;

• Holders of junior mezzanine claims will recover 0% to 9% through a class-five distribution, consisting of 4.92% of the Almatis Topco 1 shares and a share of depository receipts to buy junior preference shares with a liquidation preference of $2.05 million;

• General unsecured claims, intercompany claims and subordinated claims against DIC Almatis Holdco BV will be reinstated;

• Holders of subordinated claims will receive no distribution;

• Interests in DIC Almatis Holdco will be transferred to Almatis Holdco 2 in exchange for €1; and

• Other interests will be reinstated to preserve the debtors' corporate structure for the benefit of the holders of second-lien, mezzanine and junior mezzanine claims.

Almatis is a Frankfurt-based developer, manufacturer and supplier of premium specialty alumina products that filed for bankruptcy on April 30. Its Chapter 11 case number is 10-12308.

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