Dubai's DIC and Oaktree abandon Almatis debt plan

Private equity fund Dubai International Capital (DIC) and distressed debt investor Oaktree Capital have abandoned plans to team up to restructure the almost $1 bn debt of German aluminium firm Almatis, the Financial Times reported on Tuesday.

The FT cited people familiar with the situation as saying DIC and Oaktree suggested recapitalising Almatis with $75 mln of new capital for 90 percent of the company while lenders wrote off 400 mln of debt in exchange for the remainder of the company, but lenders rejected the plan.

It said DIC and Oaktree had declined to comment, but cited sources as saying the split was amicable and that future collaboration had not been ruled out.

Almatis, hit hard by the downturn in the metals industry, secured a standstill agreement with lenders in June, allowing it some breathing space to reorganise its finances.

A number of private equity companies have expressed an interest in acquiring Almatis, bought by DIC for $1.2 bn in 2007, but DIC has said it does not want to sell.

The FT said DIC was now working on its own restructuring plan, while Almatis was also in talks with key lenders about a proposal that would give them control of the company.