Possible Reliance/LyondellBasell investment played down

22 September 2009 14:14  [Source: ICIS news]

LONDON (ICIS news)--Suggestions that Reliance Industries may take a stake in or acquire assets from bankrupt polypropylene (PP) giant, LyondellBasell, were played down by analysts in India on Tuesday.

“I don't understand this. Why acquire assets in the developed world today,” said one.

Media reports in India on Friday linked a sale of treasury stock by Reliance with a possible investment in LyondellBasell.

US and other subsidiaries of LyondellBasell are under Chapter 11 bankruptcy protection. A rights issue is expected from the company in October as it puts together its plan to emerge from bankruptcy.

The media reports suggested that Reliance was expected to make a $3.25bn investment in LyondellBasell. Both companies declined to comment.

“I do not rule that Reliance may be participating but it would be better to buy some parts,” the analyst said “I am also not sure if the US is a great area to have refining assets,” he added.

“I remain sceptical about Reliance investing outside India. I will believe it only when it happens," he said.

Investment by Reliance in its oil and gas exploration and production (E&P) business was seen to provide more potential for growth.

Capital investment of between $10bn and $15bn would be required if all exploration blocks live up to expectations.

For more on Reliance Industries visit ICIS company intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Malini Hariharan
+65 6780 4359

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