Almatis Group Files Pre-packaged Chapter 11 Cases to Implement Agreed Financial Restructuring

- Restructuring will result in a significant reduction in the level of financial indebtedness, support future growth and protect the Company from future volatility in its marketplace

- Business operations will continue as normal with no anticipated impact on customers, trade suppliers and employees

- Implementation of the agreed Restructuring will be effectuated via a Prepackaged Chapter 11 Plan of Reorganization filed with the United States Bankruptcy Court for the Southern District of New York

- Almatis Group to be in a strong position to invest in growth with support from its largest lender, an Oaktree-managed-fund

Apr 30, 2010, 06:00 ET from Almatis Group

FRANKFURT, April 30 /PRNewswire/ -- The Almatis Group announced today that certain subsidiaries filed voluntary petitions in the United States Bankruptcy Court for the Southern District of New York for reorganization under Chapter 11 of the United States Bankruptcy Code ("Chapter 11"). In conjunction with the filings, the Company also filed its pre-packaged Plan of Reorganization ("the Plan"), the terms of which have already been approved in a Plan Support Agreement signed by over two-thirds of the holders of the Group's senior first lien debt.  

The Chapter 11 filings were made by, among others, Almatis, Inc., Almatis BV and Almatis GmbH, and include the Group's operations in the U.S., Germany and The Netherlands. Chapter 11 allows Almatis Group to continue normal operations, led by the current management team, while restructuring its financial indebtedness. The financial debt of the Almatis Group will be settled as part of the Plan; in addition, the Company is requesting court authority to pay prepetition claims of its trade vendors, employees and various other non-financial creditors, and will be able to pay all creditors in the normal course for goods and services provided after the filing.

Creditors entitled to vote have been voting on the Plan since April 23 and have until May 7 to submit votes.  To date, 100% of the votes that have been received, including 63% of the Group's senior lenders, are votes to accept the Plan and, pursuant to the Plan Support Agreement signed by almost 75% of the Group's senior lenders, the Group expects quickly to receive more than enough votes to allow approval of the Plan by the Bankruptcy Court. The Plan is expected to be presented for confirmation to the Bankruptcy Court within the next 45 days.  

Following the rapid deterioration of the trading environment in early 2009, the management of Almatis engaged in discussions with its lenders and shareholders about a financial restructuring of its balance sheet.  As a result of those discussions, Almatis and lenders holding approximately 75% of the senior debt (including an Oaktree-managed fund, which itself holds 46% percent of the senior debt, as well as the members of the coordination committee of the senior lenders) executed the Plan Support Agreement committing to support the financial restructuring now proposed in the Plan.

The Plan would enable Almatis to regain financial flexibility, support future growth and protect the Company from future volatility in its marketplace. The Company anticipates that the broad support for the Plan among senior lenders will help to ensure that the Chapter 11 process is as short as possible.  

The Company is seeking approval from the Court for a series of First Day Motions to ensure that it can continue to operate in the ordinary course during the Chapter 11 process.  The Company currently has approximately $85 million of available cash to meet operating expenses and anticipates approval, if necessary, of additional funding in the form of debtor in possession financing. Following confirmation of the Plan, it is anticipated that the Oaktree-managed fund will own a majority of the equity in the restructured Almatis Group.  Oaktree has made clear that its managed fund is fully committed to investing in the business to facilitate future growth.

"Implementing the proposed debt restructuring plan through the  Chapter 11 filing provides Almatis with an orderly process that allows us to address the necessary balance sheet restructuring while continuing to operate our business in the best interests of all stakeholders, including employees, customers, lenders and other business partners," said Remco de Jong, CEO of Almatis. "This process has been made possible now that our largest lender, an Oaktree-managed fund, has expressed its full support for the proposal and reaffirmed its commitment to the prospects and opportunities for the business going forward. We are well prepared and will do everything in our power to complete this process as quickly as possible. Our business is fundamentally sound and I am convinced that once we have fixed our balance sheet, we will emerge from this process as a stronger Company."

Note to Editors:

About Chapter 11

Chapter 11 provides a recognized and practical legal framework to reorganize over-indebted businesses under the oversight of the United States Bankruptcy Court. The effect of a Chapter 11 filing is to provide a company with protection from precipitous creditor actions, while at the same time allowing the Company time and a workable legal framework to develop and implement a plan to reorganize its debt and, if necessary, its operations.  Chapter 11 allows the Company to continue to operate and maintain its business, under the control of the Company's current management ("in the ordinary course"), during the restructuring process.  The ability to take actions in the ordinary course of business means that the Company can, among other things, continue to service its customers, receive supplies and pay wages and salaries to its employees.  Chapter 11 is, therefore, regularly used by fundamentally sound operating companies to protect enterprise value as they reorganize their debt in an orderly process. Almatis has chosen Chapter 11 as the preferred legal tool for implementing its balance sheet restructuring following extensive evaluation of available alternatives.

About Almatis

Almatis is a global leader in the development, manufacture and supply of premium specialty alumina products. With nearly 900 employees worldwide, the Company's products are used in a wide variety of industries, including steel production, cement production, non-ferrous metal production, plastics, paper, ceramics, carpet manufacturing and electronic industries. Almatis operates nine production facilities worldwide and serves customers around the world. Until 2004, the business was known as the chemical business of Alcoa.

About Oaktree

Oaktree (GSTrUE: OAKTRZ) is a premier global alternative and non-traditional investment manager with over $76 billion in assets under management as of March 31, 2010. The firm emphasizes an opportunistic, value-oriented and risk-controlled approach to investments in specialized private equity (including power infrastructure), distressed debt, high yield and convertible bonds, real estate, emerging market and Japanese securities, and mezzanine finance. Oaktree was founded in 1995 by a group of principals who have worked together since the mid-1980s. Headquartered in Los Angeles, the firm today has approximately 600 employees and offices in 14 cities worldwide. The team responsible for this investment at Oaktree is based in the firm's London office.

SOURCE Almatis Group