LyondellBasell Chapter 11 decision expected on Monday

05 January 2009 12:23  [Source: ICIS news]

By Rachel Howat

LyondellBasell continues refinancing talksLONDON (ICISnews)--LyondellBasell is continuing refinancing discussions with a syndicate of banks over the payment of $281m (€230m), which was due on Sunday, with an announcement expected by the end of the working day in New York, a company source said on Monday.

In a filing to the Securities and Exchange Commission (SEC) on 31 December, the company said that it had reached an agreement with lenders to postpone payment of $160m in fees and $121m in interest on a bridge loan until 4 January.

Two major credit rating services downgraded their ratings for the Netherlands-registered petrochemicals major on 30 December.

The highly-leveraged company had been in discussions both internally and with external advisors over the possibility of entering Chapter 11 bankruptcy protection.

A source at LyondellBasell in Europe said that parent company, Access Industries, had the means to help if no refinancing solution was found with banks on Monday.

LyondellBasell revealed in the filing that it had been denied a credit extension by Access.

“At the moment they are waiting for the outcome of discussions but in the past they have said, in a general way, that they would be willing to help. Access are not interested in losing their stake in the company.” said the source at LyondellBasell.

LyondellBasell was formed in 2007 via a merger between the Dutch-based Basell, a unit of Russian-born billionaire Len Blavatnik's Access Industries, and Houston-based Lyondell in $12.7 billion deal.

Last week, the debt markets continued to bet against LyondellBasell finding a resolution to their current problems. Bonds in the petrochemical company were trading at distressed levels as buyers of credit protection pushed up the cost of protecting the bonds against possible losses as fears that the company would file for bankruptcy grew.

($1 = €0.72)

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By: Rachel Howat
+44 20 8652 3214



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