LyondellBasell gets 60-day reprieve from creditors

26 February 2009 21:41  [Source: ICIS news]

HOUSTON (ICIS news)--LyondellBasell Industries and its solvent European subsidiaries will remain shielded for 60 days from creditors, who are trying to collect on roughly $1bn (€790m) in notes and over $125m in debts covered by guaranties, according to an order issued on Thursday in US bankruptcy court.

The court's order extends one issued earlier this month.

Those guaranties were issued by the solvent companies for some of the debts of LyondellBasell's US operations, which filed for bankruptcy protection.

Creditors had attempted to collect on the debts covered by the guaranties of the solvent companies.

However, the bankruptcy court issued a preliminary injunction, preventing the creditors from doing so. The injunction also covers $615m and €500m in notes, due in 2015.

The injunction was requested by Lyondell Chemical, one of the bankrupt units.

Lyondell Chemical argued that, without the injunction, the parent company could become insolvent and the bankrupt companies could default on their bankruptcy financing - commonly known as debtor-in-possession (DIP) financing.

Such a DIP default would be a disaster, terminating any further borrowing and accelerating the payment of all existing loans, Lyondell Chemical said. Under such circumstances, the companies would liquidate.

($1 = €0.79)

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By: Al Greenwood
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