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LyondellBasell in pact with unsecured creditors

LyondellBasell in pact with unsecured creditors
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First Published: Tue, Feb 16 2010. 10 08 PM IST
Updated: Tue, Feb 16 2010. 10 08 PM IST
Mumbai: Bankrupt Dutch petrochemicals maker LyondellBasell, which Reliance Industries Ltd (RIL) has been seeking to acquire, announced late on Tuesday evening that it had reached a settlement with unsecured creditors by raising the amount it will give them by 50% to $450 million (Rs2,079 crore).
The move may weaken the RIL bid as the unsecured creditors had been the strongest backers of the “preliminary, non-binding bid” made by the Mukesh Ambani firm in November to acquire a controlling stake after having failed to woo the LyondellBasell management.
The firm’s management had consistently preferred its original plan of reorganization with creditors, led by investors Access Industries Holdings Llc, Apollo Management Lp and Ares Corporate Opportunity Fund III.
While the Indian company never put a value to the deal, street estimates had initially pegged it between $10-12 billion. Later, RIL reportedly raised it to $13.5 billion.
LyondellBasell spokesman David Harpole could not be reached for comment right away as he was in a court in New York, according to his office. An RIL spokesman had no comment to offer immediately on how this settlement will impact it’s takeover bid.
Lawyers in New York-based law firm Brown Rudnick Llp, which represented the creditors, were not reachable at the office when Mint called for comments.
In a statement announcing the “settlement of inter-creditor dispute”, the firm said that “an agreement has been reached that will help pave the way to LyondellBasell’s emergence from Chapter 11” bankruptcy. Subject to final approvals from the court and documentation, the plan which “resolves objections by the Unsecured Creditor’s Committee”, raised the payout to the “holders of general unsecured claims, the Millennium Bonds and 2015 Notes” from the previous $300 million.
It could not be immediately ascertained whether RIL would end its interest in acquiring LyondellBasell.
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First Published: Tue, Feb 16 2010. 10 08 PM IST