4th August 2010
The Almatis Group announced today that it has received authority to enter into a Plan Support Agreement with DIC and certain holders of the second lien, mezzanine and junior mezzanine debt of the Almatis Group. The Plan Support Agreement paves the way for the Almatis Group, before the end of the week, to withdraw its currently pending pre-packaged plan and file the New Plan, a DIC-led fully committed refinancing, in the reorganization cases under Chapter 11 of the United States Bankruptcy Code (”Chapter 11″) pending in the United States Bankruptcy Court for the Southern District of New York. The Group will also file later this week a Disclosure Statement related to the New Plan.
The New Plan has the support of Almatis Group’s largest shareholder, Dubai International Capital (”DIC”), the international investment arm of Dubai Holding, and requisite holders of the Almatis Group’s second lien, mezzanine and junior mezzanine debt. Pursuant to a settlement also announced by the Almatis Group today, Oaktree Capital Management, the largest single holder of the Group’s senior debt has agreed to support the New Plan. The settlement with Oaktree Capital Management is subject to approval of the Bankruptcy Court.
The DIC-led refinancing provides for the full repayment of the Group’s senior first lien debt, and also proposes significantly enhanced distributions to the junior creditors of the Group. Funding for the New Plan will come from a $100 million equity contribution that DIC has already escrowed for this purpose with JP Morgan and from approximately $600 million of debt financing to be provided by a consortium of JP Morgan, Bank of America Merrill, GSO Capital Partners, GoldenTree Asset Management and Sankaty Credit Opportunities IV.
The court has scheduled the hearing to consider approval of the Disclosure Statement related to the New Plan, and the settlement with Oaktree Capital Management, for August 23, 2010. Almatis anticipates the confirmation of the new plan of reorganization in late September.
While the New Plan is being considered by the Court, the court approval that enables the Group to continue to operate in the ordinary course of business led by the current management team remains in place. This includes the approval to use its cash to continue wage, salary and benefit payments and to pay all vendors in the ordinary course for goods and services delivered after the filing. In addition, the Company received court authority to pay prepetition claims of employees and non-US trade vendors and prepetition claims of critical US trade vendors.
The financial restructuring will enable Almatis to regain financial flexibility, support future growth and protect the Company from future volatility in its marketplace.
“We have spent the last several weeks carefully evaluating the opportunity presented by the New Plan, finalizing the terms of the funding to be provided by DIC, GSO Capital Partners, GoldenTree, Sankaty and JPMorgan/ BoA. We are confident that the refinancing implemented by the New Plan is in the interests of all stakeholders, including employees, customers, lenders and other business partners,” said Remco de Jong, CEO of Almatis. “We remain committed to concluding the Chapter 11 process as quickly as possible and look forward to pursuing growth opportunities with the support of our shareholders in the near future.”
The consolidated case number for the chapter 11 filings by the Group is 10-12308.
