LyondellBasell contemplates filing for bankruptcy protection as it tries to restructure debt

02-Jan-09
World Number 3 petrochemical company LyondellBasell that has been struggling to cope with deteriorating petrochemical demand amid production cuts at some locations amid a global economic downturn; is weighing the option of filing for Chapter 11 bankruptcy protection as it tries to restructure its debt. It also reflects the unwinding of debts piled up in recent years as banks lent money cheaply, especially in leveraged buyouts. The team of advisers that had been hired , to counsel it as it restructures includes Evercore, turnaround firm Alix Partners and New York law firm Cadwalader, Wickersham & Taft LLP. Hiring advisers does not necessarily mean a company will file for Chapter 11 bankruptcy protection. Some companies are able to restructure debt and operations outside of court. LyondellBasell was created when Dutch-based Basell, a unit of Russian-born billionaire Len Blavatnik's Access Industries, bought Houston-based Lyondell for about US$12.7 bln. LyondellBasell, which has a total of US$26 billion in debt, disclosed in a recent regulatory filing that it had begun negotiating with lenders on extending payment dates and restructuring debt. It negotiated one postponement on US$160 mln in loan-related fees. Its lenders include Merrill Lynch, Goldman Sachs, Citigroup, ABN AMRO and UBS Securities LLC. The company, however, has announced that there has been no change at operations of its two crude oil refineries in Houston and in France. Its 2 subsidiaries, Lyondell Chemical and Equistar Chemicals, said in U.S. regulatory filings that lenders had agreed to repostpone payment of the US$160 mln in fees as well as US$121 mln of interest payments until Jan. 4. But Lyondell Chemical had been denied a credit extension it had requested for its revolving credit agreement.
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