Oaktree Capital Management and Anchorage Capital have built positions in the bankruptcy financing of First Brands Group, adding to the roster of investors involved as the auto parts supplier races to secure fresh liquidity, Bloomberg News reported.
The two firms have purchased stakes in First Brands’ roughly $1.1 billion debtor-in-possession loan, a form of bankruptcy financing that typically has priority over other claims, according to people familiar with the matter cited by Bloomberg. The loan has been trading at distressed levels, reflecting concern over the company’s deteriorating cash position.
The move comes as First Brands negotiates a potential additional loan with existing lenders after warning it could run out of cash by the end of January without new funding. The company has said a shortfall could force it to shut down some operations or sell assets.
First Brands had sought as much as $800 million in new capital late last year and has told creditors it needs additional funds to continue operating and cover bankruptcy-related expenses. Approval of any new, higher-priority financing would require the backing of at least two-thirds of the current debtor-in-possession lenders, advisers told creditors during a December call.
