19 January 2009 14:43 [Source: ICIS news]
LONDON (ICIS news)--The Royal Bank of Scotland (RBS) expects to take a fourth quarter charge of close to £1bn ($1.5bn, €1.3bn) on its exposure to LyondellBasell, approximately one third of projected credit impairment losses for the quarter, the bank said on Monday.
RBS took on the debt to the chemicals maker when it bought the Netherlands-based banking group ABN-Amro in 2007. A trading statement revealed that RBS believes its losses on bad debts and asset write-downs for 2008 as a whole could total £28bn.
The chemicals group listed debts of $19bn in its Chapter 11 filing and had made arrangements for $8bn of Debtor in Possession (DIP) financing to fund on-going operations one of the largest such amounts secured in any bankruptcy.
It told creditors on Friday (16 January) there had been “no definitive indications of reversal” in the weak demand environment with no visibility across its product range.
In the fourth quarter plant operating rates were 50%, it added. In a filing to the Securities and Exchange Commission (SEC) it noted the November/December price collapse and “significantly negative” polymer margins in the EU in the quarter.
($1 = £0.68, €0.75)
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