Oaktree Capital Management is willing to give up its fight for control of Almatis, a bankrupt aluminium maker, for full payment of its loans and an end to threatened legal action, according to a “confidential” court filing on Monday.
In a letter dated July 27 to an Almatis lawyer, Oaktree's lawyer outlined six conditions for ending Oaktree's battle with Dubai International Capital (DIC) over the European aluminium company.
The letter appeared to signal that DIC was going to remain in control of Almatis, the former unit of Alcoa it purchased in 2007 for $1.2 billion.
The letter was marked “highly confidential for settlement purposes only not to be used in litigation, but was filed publicly on the electronic docket on Monday”.
An attorney for a group of creditors who hold junior loans, Michael Cook, filed a notice to withdraw the document two hours later. It was still publicly available as of Monday afternoon.
Cook, of law firm Schulte Roth Zabel, declined to comment. Attorneys for the company and Oaktree also declined to comment.
The letter was attached to a court filing in which Cook was stating a group of creditors' support for the company's reorganisation plan. He said in the court documents the letter was sent to the creditors' attorney without restrictions.
Almatis filed for bankruptcy earlier this year with more than $1bn in debt, which it planned to restructure under a proposal supported by Oaktree.
Oaktree manages more than $75bn that it invests in financially hobbled companies, often in bankruptcy. Earlier this year it acquired a significant stake in US aluminium maker Aleris International when it emerged from bankruptcy.
Last month, Almatis abandoned Oaktree and said it was backing a new proposal from DIC.
In the letter, Oaktree said it would continue to "oppose confirmation of the amended plan at every opportunity" unless Almatis agreed to pay Oaktree in full, including its legal fees.
Oaktree also wanted the company to exit bankruptcy by October and wanted legal releases from junior lenders, DIC and the company.
Oaktree also wanted Almatis to "make a statement to the press in support of Oaktree's efforts in connection with Almatis' restructuring upon confirmation of the amended plan using such language as is satisfactory to Oaktree”.
Oaktree gave the company until July 28 to reply. On July 29, Oaktree filed a motion to oppose Almatis' use of its cash collateral, which companies need to finance operations while in bankruptcy.
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