US firm advising Oaktree as co-investor, and main contender, DIC picks Weil.
Kirkland & Ellis will represent Oaktree Capital Management in its proposed $1bn (£650m) restructuring of Almatis when it files for US Chapter 11 bankruptcy, the latest in a string of high-level mandates for the firm.
Almatis, the world’s largest producer of alumina products, was given the green light to file for Chapter 11 last week after a hearing at a Dutch court. The move follows a long-running dispute involving Almatis senior lenders and Dubai Capital Investment.
Other leading firms in the US and UK have also secured mandates on what is one of the world’s biggest restructurings.
Almatis was bought by Dubai International Capital (DIC), the international investment arm of Dubai Holding, for an undisclosed fee in 2007, believed to be around $1.2bn.
But the Frankfurt-based company was hit hard in the downturn and the falling demand for alumina and last year defaulted on its debt.
DIC put forward its own refinancing plans last year which would have seen it inject $50m into the company, but it failed to receive the support of two-thirds of senior lenders.
What did get their support, however, was a plan drawn up by Oaktree, which owns 46 per cent of senior debt in Almatis.
Its restructuring plans would see the firm’s $1bn of debts halved to around $422m under prepackaged Chapter 11 proceedings, which would leave Oaktree owning an 80 per cent stake in Almatis.
DIC, represented by Weil Gotshal & Manges partner Mike Francies and Dutch firm Houthoff Buruma, strongly opposed the plans. Last month it filed a petition at the Enterprise Chamber of the Investment Court of Appeal in the Netherlands to prevent it from going ahead.
Last week the Dutch court ruled against DIC’s petition, but DIC has since vowed to continue its own refinancing efforts and will continue to contend Oaktree’s restructuring plan.
A source close to the deal says a filing for Chapter 11 bankruptcy is expected to take place in the US this week and that Almatis hopes to be out of Chapter 11 by mid-June.
Oaktree is being represented by Kirkland partners Kon Asimacopoulos, Jamie Sprayregen, Adam Paul and Leo Plank, and in the Netherlands by Loyens & Loeff partner Hendrik Van Druten.
Almatis is represented in the UK by Linklaters partner Robert Elliott and in the US by Gibson Dunn partner Michael Rosenthal, as well as De Brauw Blackstone Westbroek partner Ruud Hermans in the Netherlands.
The senior lender coordinating committee is represented by Allen & Overy partners Ian Field and Rob Abendroth and senior counsel John Kibler.
For Kirkland it is the latest in a line of impressive restructuring mandates. The firm is currently acting on European Directories’ e2.1bn (£1.85bn) restructuring and acting as lead global restructuring counsel for Japan Airlines. Other recent matters have included the UK sale of Reader’s Digest.
New York-based partner Sprayregen said the firm was well-placed to deal with the Almatis mandate, having handled numerous complex Chapter 11 filings.
“It’s a complicated mandate,” he says. “We’re pleased to have been brought in to help out. It’s exactly the kind of mandate we’re able to handle very well. It’s large, complex, cross-border – it has all the ingredients of what we do well.”
Sprayregen adds that the deal has “everything”, including Middle East, European, UK and US elements.
“Fortunately we’ve built up a legal team with the specialist knowledge to handle these kinds of matters,” Sprayregen says.
“The markets have contracted somewhat, but we feel we get our market share.”