UPDATE 1-Clock ticking for Almatis restructuring -sources

* September deadline for $1 bln Almatis restructuring

* Distressed debt investor Oaktree backs owner ahead of deal

* Twin-track strategy means sale still possible

(Adds response from company, adds detail to payment request)

By Tom Freke

LONDON, July 10 (Reuters) - Lenders to German alumina company Almatis [ALMTI.UL] have until September to agree a restructuring of its debt pile or a sale of the company, sources close to the situation said on Friday.

Almatis needs to make payments by the end of September to former owner Alcoa (AA.N) to pre-fund this year's commitment to its feedstock supply contract, two of the sources said.

"They are looking to fix their balance sheet before the payment is made, so that's the reason for the urgency," one of the sources added.

A spokesman for Almatis denied the company needed to make the payment before the feedstock was delivered.

But when confronted with Almatis' denial, the two sources maintained the payment -- or at least a commitment to the payment -- was needed.

The Frankfurt-based company's owner, Dubai International Capital [DUBAHP.UL], last week agreed to partner with distressed debt investor and major Almatis lender, Oaktree Capital, to restructure the company's debt, which totals almost $1 billion.

But the company remains up for sale despite DIC's partnership with Oaktree, three of the sources said.

"If the right buyer came along offering the right money, then it is hard to rule out a sale," said one source.

DIC, the investment arm of Dubai Holding, said last week it had no intention of selling Almatis, which produces speciality alumina materials used for a range of industrial purposes.

However, lenders have a big say in the future of the company and may opt to line up behind a different owner of the firm, two of the sources said.

DIC and Oaktree are due to put a restructuring proposal to lenders before the end of July, two of the sources said.

Almatis, hit hard by the downturn in the metals industry, secured a standstill agreement with lenders in June, giving the company some breathing space to reorganise its finances.

Any restructuring would see the company's debt cut and new money injected onto the balance sheet, two of the sources said.

A number of private equity companies have expressed an interest in acquiring Almatis, bought by DIC for $1.2 billion in 2007, two more of the sources said.

Almatis, Oaktree and DIC all declined to comment. (Editing by Jon Loades-Carter)