Lyondell Chemical was purchased by Netherlands-based firm Basell (owned by a Russian oligarch) in July 2007. The new firm, LyondellBasel, burdened by the $12.7 billion leveraged buyout, filed for Chapter 11 bankruptcy protection in January of 2009.
LyondellBasell said yesterday that one of its European holding companies had also filed for bankruptcy protection and that it arranged for up to $8 billion (£5.4 billion) in financing to keep operating. The private company took on billions of dollars in debt obligations a year ago, when Mr Blavatnik led a $12.7 billion leveraged buyout of Lyondell, an American company, by Basell of the Netherlands.
Volker Trautz, chief executive of LyondellBasell, said the company had seen a dramatic softening in demand and volatile raw materials costs over the past two quarters.
“December was particularly difficult, as many of our customers postponed orders to reduce their inventories,” he said.
Basell Finance, a subsidiary of LyondellBasell Industries, also filed for bankruptcy protection. It said that it had listed assets and debt of more than $1 billion and admitted that it was keeping at bay more than 25,000 creditors. It is believed that the company’s 79 affiliates will also file for court protection.
The latest filings indicate that LB will emerge from Chapter 11 protection this month.
This week rumors are circulating that Indian chemical giant Reliance Industries is aiming for a takeover.
Reliance Industries has a market value of about $70 billion and is the most widely held stock by fund managers in India. The company has a cash of $4.6 billion and gross debt of $10.8 billion. With such a strong financials and cash raised from the proposed sale of treasury stock, the company’s desire for aggressive growth via inorganic model is obvious.
