LyondellBasell asks US court for permission to pay US$350 mln to foreign creditors

08-Jan-09
Wilting under pressure of a massive debt load and deteriorating ping demand for its products, the U.S. operations of LyondellBasell, the world´s third-largest petrochemical company, has filed for bankruptcy protection. The New York bankruptcy filing includes almost 80 units of the company and encompasses its US operations and a European financing arm. The company's non-US operations are not included in the Chapter 11 bankruptcy and are continuing to operate as usual. Chapter 11 means that Lyondell is protected from its creditors in the US while it attempts to restructure the business. But foreign suppliers may consider themselves beyond the jurisdiction of the US courts and sue Lyondell in another country. Lyondell Chemical has asked a New York court for permission to pay its foreign creditors US$350 million amid fears that suppliers will cut off its access to raw materials or sue it. It's US business depended on materials supplied by foreign companies, who, if not paid in time for goods supplied, could cut off supplies and put the company out of business. The company had taken billions of dollars in debt obligations a year ago, when billionaire Len Blavatnik led a US$12.7 bln leveraged buyout of US firm Lyondell by Basell of the Netherlands. LyondellBasell's largest creditors included Venezuelan oil company Petroleos de Venezuela (PDVSA), Algerian energy group Sonatrach, Exxon Mobil Corp. and Dow Chemical Co. Its lenders include Merrill Lynch, Goldman Sachs Group Inc., Citigroup Inc., ABN AMRO and UBS Securities LLC. Private equity firm Apollo Management LP is among the largest creditors of Lyondell Chemical Co.
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