Oaktree Capital Management and Anchorage Capital have taken positions in First Brands Group’s $1.1bn debtor-in-possession loan, stepping into a distressed financing as the company races to secure fresh liquidity, according to a report by Bloomberg.

The distressed-debt investors bought stakes in the bankruptcy loan as it trades at reduced prices. First Brands, which supplies auto parts including Fram motor oil, has warned creditors that it will run out of cash by the end of the month without additional funding.

The company is negotiating a new loan with existing lenders, after seeking as much as $800m in fresh capital in December. Any additional financing would require approval from two-thirds of current DIP lenders, advisers to creditors said on a recent call.

Discussions have been complicated by concerns over advisory fees accumulated since First Brands filed for Chapter 11 protection in September. The company is also attempting to unwind a series of factoring transactions that restructuring advisers say saddled the business with billions of dollars of debt.

First Brands has said a failure to secure new money could force it to shut down parts of the business and sell assets. 

If you think we missed any important news, please do not hesitate to contact us at [email protected].

Can`t stop reading? Read more.