{"id":247,"date":"2009-12-15T16:26:00","date_gmt":"2009-12-15T10:56:00","guid":{"rendered":"http:\/\/ivyproschool.com\/blog\/?p=247"},"modified":"2024-11-11T15:39:00","modified_gmt":"2024-11-11T10:09:00","slug":"ril-woos-lyondell-creditors-as-management-fights-back","status":"publish","type":"post","link":"https:\/\/ivyproschool.com\/blog\/ril-woos-lyondell-creditors-as-management-fights-back\/","title":{"rendered":"RIL WOOS LYONDELL CREDITORS AS MANAGEMENT FIGHTS BACK"},"content":{"rendered":"

New York bankruptcy court to hear former owner\u2019s updated rescue plan today.<\/p>\n

Reliance Industries Ltd (RIL), in its efforts to gain control over LyondellBasell, is looking to team up with the unsecured creditors and bond holders of the bankrupt Dutch petrochemicals giant.<\/p>\n

Sources close to the development said the move came after the LyondellBasell management filed an updated rescue plan last week that centred on a $2.5 billion cash infusion by the company’s former owner and two investors, despite receiving an unbinding offer from RIL for an acquisition.<\/p>\n

A bankruptcy court in New York will hear the updated rescue plan of the management tomorrow and take the views of creditors to LyondellBasell on the proposal.<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n
\u00a0<\/strong>ON THE BLOCK<\/strong><\/td>\n<\/tr>\n
\u00a0<\/strong>DECEMBER 2007<\/strong><\/td>\n<\/tr>\n
LyondellBasell formed after a $20 billion acquisition of Lyondell by Basell<\/td>\n<\/tr>\n
JANUARY 2009<\/strong><\/td>\n<\/tr>\n
LyondellBasell files for bankruptcy protection under Chapter 11<\/td>\n<\/tr>\n
NOVEMBER 21, 2009<\/strong><\/td>\n<\/tr>\n
LyondellBasell receives a preliminary non-binding offer from Reliance<\/td>\n<\/tr>\n
DECEMBER 7, 2009<\/strong><\/td>\n<\/tr>\n
LyondellBasell reaches deal with a group of banks for settling a $21 billion lawsuit in its bankruptcy case, paying $300 million<\/td>\n<\/tr>\n
DECEMBER 11, 2009<\/strong><\/td>\n<\/tr>\n
The unsecured creditors reject the management\u2019s offer and support Reliance\u2019s acquisition plan<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

RIL executives, however, indicated that the company would wait for the result of tomorrow\u2019s hearing before floating a concrete proposal on formulating an alternative plan. \u201cBefore we know the result of the hearing, it is worthless to work on our plans. If the court approves the revival plan of the existing management, the chances would be less for RIL,\u201d they added.<\/p>\n

The Indian petroleum giant feels the unsecured creditors, who are fighting against the management and secured creditors in court, may raise their voice against the $2.5 billion revival proposal and come up with a better alternative after working with RIL.<\/p>\n

An email sent to RIL did not elicit any response.<\/p>\n

A team of RIL officials is still in the US, meeting creditors, management officials and legal experts to frame a binding proposal for buying LyondellBasell. \u201cThe proposal of RIL is likely to be submitted before the bankruptcy court, provided it wins the support of unsecured creditors and bond holders. The company\u2019s earlier plan to submit the proposal to the LyondellBasell management went off track after the management came out with its own plan,\u201d said sources in the banking sector.<\/p>\n

The revival plan of the management, if implemented, may dilute the rights of the equity holders and transfer the company to the sponsors of the $2.5 billion rights issue: Former owner and Russian-born billionaire Len Blavatnik and two investors, and its secured creditors. According to legal experts, as there is no collateral offered to unsecured creditors for their loans, the equity offering to them would depend on the court\u2019s verdict.<\/p>\n

LyondellBasell, which had revenues of $50 billion before it filed for bankruptcy protection last January, had urged creditors to accept the refurbished proposal but the unsecured creditors rejected the offer.<\/p>\n

The committee of unsecured creditors, called \u2018Creditors\u2019 Committee\u2019, last week urged the court to allow it to work directly with potential investors, including RIL, for rescuing the world\u2019s third largest petrochemicals company. The committee, in a filing before the bankruptcy court, expressed fear that the management might not give due consideration to the RIL proposal.<\/p>\n

\u201cA sale to, or other significant investment by, a strategic investor (like RIL) would interfere with the interests of these institutional investors (they are also in race to gain control of LyondellBasell) who have powerful influence over debtors (the LyondellBasell management),\u201d the committee said, requesting the court for the power to work on an alternative rescue plan with companies like RIL.<\/p>\n

The general unsecured creditors hold $2.3 billion worth of debt, in addition to the $1.35 billion debt with bond holders. Moreover, Lyondell had arranged a temporary bridge loan of $8.5 billion to buy Basell in December 2007, which is also on the merged entity\u2019s books.<\/p>\n

The secured creditors, who now support the LyondellBasell management, have arranged $12.1 billion worth of loans for the acquisition. Citibank, Merrill Lynch, ABN Amro, UBS Securities, Merrill Lynch Capital Corp, Goldman Sachs Credit Partners, Pierce, Fenner & Smith and Citigroup Global Markets arranged the bridge loan. The $12.1 billion secured credit was offered by Citibank, Citigroup Global Markets, Goldman Sachs Credit Partners, Deutsche Bank Trust Company Americas, Merrill Lynch, Pierce, Fenner & Smith, ABN AMRO and UBS Securities.<\/p>\n

The US bankruptcy court will clear the revival plan of the LyondellBasell management if half of the debtors in each class accept the proposal. Also, the half should also have two-thirds of the claims in financial terms. After filing the revival proposal, the management said it might rework the plan if a class of claimants disapproved it.<\/p>\n

Last week, the unsecured creditors rejected the $300 million settlement offer to the management which would allow the company to go forward with a plan to exit bankruptcy protection. Lyondell\u2019s unsecured creditors had sued the lenders and advisers who put together the 2007 deal, including Citigroup, Deutsche Bank AG and Goldman Sachs Group Inc, contending that the buyout of US firm Lyondell by Dutch company Basell left the combined entity doomed to fail because it had \u201cunreasonably small capital\u201d to support the debt from the merger.<\/p>\n

Source: www.business-standard.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

New York bankruptcy court to hear former owner\u2019s updated rescue plan today. Reliance Industries Ltd (RIL), in its efforts to gain control over LyondellBasell, is looking to team up with the unsecured creditors and bond holders of the bankrupt Dutch petrochemicals giant. Sources close to the development said the move came after the LyondellBasell management filed an updated rescue plan last week that centred on a $2.5 billion cash infusion by the company’s former owner and two investors, despite receiving an unbinding offer from RIL for an acquisition. A bankruptcy court in New York will hear the updated rescue plan of the management tomorrow and take the views of creditors to LyondellBasell on the proposal. \u00a0ON THE BLOCK \u00a0DECEMBER 2007 LyondellBasell formed after a $20 billion acquisition of Lyondell by Basell JANUARY 2009 LyondellBasell files for bankruptcy protection under Chapter 11 NOVEMBER 21, 2009 LyondellBasell receives a preliminary non-binding offer from Reliance DECEMBER 7, 2009 LyondellBasell reaches deal with a group of banks for settling a $21 billion lawsuit in its bankruptcy case, paying $300 million DECEMBER 11, 2009 The unsecured creditors reject the management\u2019s offer and support Reliance\u2019s acquisition plan RIL executives, however, indicated that the company would wait […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-247","post","type-post","status-publish","format-standard","hentry","category-data-analytics"],"yoast_head":"\nRIL Courts LyondellBasell Creditors Amid Bankruptcy Battle<\/title>\n<meta name=\"description\" content=\"Reliance Industries Ltd (RIL) seeks to acquire LyondellBasell, partnering with unsecured creditors against management's $2.5 billion revival plan.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/ivyproschool.com\/blog\/ril-woos-lyondell-creditors-as-management-fights-back\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"RIL Courts 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