London: German aluminum company Almatis Group has sought court permission to strike a deal to enter a new Chapter 11 plan of reorganisation, that will see its owner, Dubai International Capital, retain control of the company.

Almatis, which filed the motion late on Friday at the US Bankruptcy Court for the Southern District of New York, said under the new plan, Almatis' senior debt would be repaid in full, with interest, and junior creditors would be given "significantly enhanced distributions".

"The new plan would be funded by approximately $600 million (Dh2.2 billion) debt financing from several established financial institutions and a $100 million equity contribution from Dubai International Capital," Almatis said in a statement.

Debt financing

Court papers, previously filed by Almatis, show the backers of the debt financing are Blackstone's credit fund GSO Capital Partners LP, Sankaty Credit Opportunities IV LP, GoldenTree Asset Management LP, Bank of America Merrill Lynch International (BAC) and several units of J.P. Morgan Chase & Co (JPM), Dow Jones Daily Bankruptcy Review last week reported.

A court hearing on the motion is scheduled for August 3.

The new Chapter 11 plan comes after Almatis's management put the company in Chapter 11 on April 30, as part of debt-for-equity swap led by US distressed debt investor Oaktree Capital Management, which owns 46 per cent of Almatis's first-lien debt.

Under Oaktree's plan, senior lenders would have swapped their nearly $700 million in debt for the reorganised company's equity and new debt, with Oaktree expected to own the majority of the equity.

New financial plan

The plan, which would have more than halved Almatis' $1 billion debt to around $422 million, would have wiped out existing equity and given junior lenders warrants to buy shares of the reorganised company. Oaktree's plan won the support of 77.4 per cent of holders of its senior debt, in terms of value, and 58.1 per cent in number.

However, DIC vocally opposed the plan and promised to present an alternative that would allow senior lenders to be paid in full, while giving junior lenders a greater recovery than the Oaktree plan.

An earlier refinancing plan, put forward by DIC consisted of a $350 million high-yield bond, $165 million to $240 million of subordinated debt and a $100 million equity injection from DIC.