Bankrupt German aluminum maker Almatis is considering a new refinancing proposal from its owner Dubai International Capital (DIC), but Almatis senior debtholder Oaktree Capital Management urged the judge to stick to the original reorganization plan.

In a letter dated July 7 to Judge Martin Glenn, who is overseeing the case, Almatis' attorney said he had received a proposal from Dubai International Capital, to pay off the company's senior debt in full.

Junior creditors would receive a greater recovery than under the company's current plan, which is supported by Oaktree, the largest holder of Almatis senior debt, according to the letter.

'Unlike prior proposals received from DIC, the alternative plan proposal comes with evidence, which the debtors are currently evaluating, of financing necessary for its implementation,' the letter said.

The letter said the company thinks the proposal is compelling enough to justify further talks. Almatis asked the judge to postpone the company's July 19 confirmation hearing to approve its original plan of reorganization. The company requested that the hearing on that day be used instead for it to provide an update on talks with DIC.

That request was opposed by Oaktree. 'Oaktree is unaware of any facts suggesting that this DIC proposal, as opposed to all prior DIC proposals, is feasible and deliverable,' Oaktree said in the letter to the judge.

Oaktree said the company had not shared the DIC proposal with them.

Under the current plan, senior lenders led by Oaktree will end up owning Almatis in exchange for reducing some of its $1 billion of debt. The debt stems from the leveraged buyout of the company by DIC.

A source close to the situation said the real concern about any new DIC investment was that it will not give the company the funds it requires for growth and development.

Almatis and its attorneys, and Oaktree did not return calls for comment.-Reuters