Ruling to force Reliance to rework Lyondell strategy - source

20 January 2010 12:04  [Source: ICIS news]

MUMBAI (ICIS news)--Reliance Industries will have to re-evaluate its strategy for acquiring LyondellBasell following a recent ruling by a US bankruptcy court, a source familiar with the developments said on Wednesday.

“The unsecured creditors’ bid [to include the Reliance offer] has been rejected. That route is closed. And the exclusivity period [for the management plan] is until 15 April. So Reliance will have to rework its strategy,” said the source.

The court on 19 January granted Lyondell Chemical, the US arm of LyondellBasell, time until 15 April to file a reorganisation plan. During that period, no other competing reorganisation plans can be filed with the court.

The court also rejected a request by unsecured creditors to expand the scope of an examiner to review how Lyondell was evaluating Reliance’s bid.

“Reliance can still make a binding bid to the LyondellBasell management and then they can take it to court; it can also increase its offer. Reliance will have to evaluate [options],” the source said.

Reliance declined to comment for this story.

Reliance first made a preliminary, non-binding offer for LyondellBasell in November 2009.

Earlier this month, Reliance was reported to have raised its offer by $1.5bn (€1.05bn) to $13.5bn.

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By: Malini Hariharan
+65 6780 4359

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