Dutch Court Rejects DIC's Almatis Petition - Sources

* username: rupertbu

A Dutch court on Monday turned down Dubai International Capital's petition to allow it more time to finalize and implement a refinancing plan for German aluminium company Almatis, people familiar with the matter said Monday.

The Amsterdam Court of Appeals' decision means that distressed debt investor Oaktree Capital, which is trying to take over the company through a debt restructuring, will now go ahead with its plans to file for U.S. Chapter 11 bankruptcy for Almatis, one the people said.

Oaktree plans to use the Chapter 11 procedure to instigate a debt-for-equity swap that will more than halve Almatis' $1 billion debt to around $422 million. Subordinated-mezzanine and second-lien lenders and DIC's equity stake will all be wiped out under the plan.

Oaktree holds 46% of Almatis' senior debt and had support from at least an additional 22% of senior lenders.

Oaktree is expected to make the Chapter 11 filing for Almatis on Thursday.

Almatis's management supported Oaktree's plan in court, saying it is the only credible and viable option, as did the worker's council, which represents Almatis employees, and the company's senior lender coordinating committee.

However, another person familiar with the matter said DIC will continue to pursue its plans to refinance Almatis, which it is entitled to do under the Chapter 11 procedure.

DIC's refinancing plan consisted of a $350 million high-yield bond, $165 million to $240 million of subordinated debt and a $100 million equity injection from DIC, people previously told Dow Jones Newswires.END