LyondellBasell adds Luxembourg-based holding company to Chapter 11

27-Apr-09
LyondellBasell, the world's third-largest petrochemical company, has added a Luxembourg-based holding company to its Chapter 11 bankruptcy protection to hold off claims against it from financial and US trade creditors. LyondellBasell added the Luxembourg holding company to the chapter 11 protection to prevent creditors from enforcing guarantees provided by LyondellBasell Industries AF on obligations of its US businesses. It would also prevent holders of its 2015 bonds from also potentially pursuing remedies against the company. According to the company, extending Chapter 11 protection to LyondellBasell Industries AF S.C.A. is not an insolvency proceeding under any European law. The operating businesses of the European operations will continue to operate as normal. No other manufacturing operation located outside of the United States has applied for or become involved in insolvency or bankruptcy proceedings in its respective home country. As early as January, the company applied for chapter 11 in USA for its US operations and a German financing arm, mainly due to a massive debt load and slumping demand for its products. In February, the company missed payment of coupons on its $615 million and 500 million euro 2015 European bonds, but obtained a 60-day restraining order from the U.S. bankruptcy court to protect its European assets.
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