City and Wall Street elite seal end to Almatis restructuring dispute
The long-running dispute over the restructuring of Dutch almunia company Almatis, which saw mandates for a string of top US and City firms, appears to be settled after a bankruptcy judge give the go-ahead for the company to emerge from Chapter 11 protection.
Almatis, the world’s largest producer of alumina products, filed for bankruptcy in April after creditors rejected owner Dubai International Capital’s (DIC) plans to refinance $1bn (£639m) of debt.
Among those senior creditors was distressed asset investor Oaktree Capital Management, which owned 46 per cent of Almatis’ senior debt. Under advice from Kirkland & Ellis partners Kon Asimacopoulos, Jamie Sprayregen, Adam Paul and Leo Plank Oaktree wanted the company to enter bankruptcy and exchange its debt for a stake in the company’s ownership (19 April 2010).
But under plans approved by the US bankruptcy court of the Southern District of New York DIC, which was advised by Weil Gotshal & Manges partner Mike Francies and Dutch firm Houthoff Buruma, has agreed to hand over a 40 per cent stake in Almatis to the junior creditors and repay the senior debt in full. It leaves DIC with a 60 per cent stake in the company.
The junior lenders, which include Babson Capital, Permira and Alcentra, were represented by Freshfields Bruckhaus Derringer. While they were initially opposed to DIC’s original plans, more than 90 per cent of the mezzanine lenders and all the junior mezzanine lenders agreed to the new deal.
The Freshfields team was jointly led by finance partner Chris Howard and senior finance associate Sean Lacey, with support from partners Farah Ispahani (corporate), Thijs Flokstra (corporate and finance), Eelco van der Stock (tax), and corporate associates Amy Beckingham and Adam Babiker.
Howard said: “The Almatis restructuring was extremely challenging and against significant odds we were able to achieve a result far better than originally anticipated by our clients when they had faced only making a minimal recovery under the plan initially filed with the US bankruptcy court in April 2010.”
Other senior lenders, which include UBS, Commerzbank and Bank of Ireland, were advised by Allen & Overy partners Ian Field and Rob Abendroth and senior counsel John Kibler.
Almatis was represented in the UK by Linklaters partner Robert Elliott and in the US by Gibson Dunn partner Michael Rosenthal. De Brauw Blackstone Westbroek partner Ruud Hermans advised on Dutch aspects of the deal.
