Reliance raises LyondellBasell offer to $13.5bn - sources

08 January 2010 09:09  [Source: ICIS news]

By Malini Hariharan

MUMBAI (ICIS news)--Indian conglomerate Reliance Industries has raised its valuation of LyondellBasell by $1.5bn (€735m) to $13.5bn, a source familiar with developments said on Friday.

“This is $1.5bn higher than its earlier valuation. Reliance has written to LyondellBasell about this. It is also looking at participating in an equity issue that LyondellBasell has planned,” the source said.

LyondellBasell, whose US operations filed for bankruptcy protection last year, has planned a $2.8bn rights issue as part of its reorganization plan. The plan also includes $300m in cash payments for unsecured creditors; the resolution of claims against LyondellBasell’s secured senior and bridge lenders.

LyondellBasell has said that it had received substantial creditor support for its plan to reorganise the company and come out of US bankruptcy protection.

“But unsecured creditors have not supported the plan as they are getting virtually nothing,” the source said.

Unsecured creditors of Lyondell Chemical, which is among the US units of LyondellBasell, have urged that the company fairly evaluates proposals from suitors such as India’s Reliance.

“It is a fluid situation and Reliance is playing it by the ear. There is no point in quoting high from day one; it is a strategy,” said the source.

The source added that Reliance was waiting for the outcome of a US bankruptcy court hearing on 12 January when LyondellBasell’s request for time until 6 September to solict votes for its own reorganisation plan would be heard.

“If the court allows this then Reliance will have to wait. Unsecured creditors also want a say in LyondellBasell’s reorganization and the court has to decide on this,” he added.

($1 = €0.70)

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By: Malini Hariharan
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