09 March 2010 09:41 [Source: ICIS news]
MUMBAI (ICIS news)--An outright rejection from LyondellBasell has not completely killed off Reliance Industries’s chances of taking a stake in the polymers giant, whose reorganisation plan still needs to be approved by the US bankruptcy court, analysts said on Tuesday.
"The process is still not over as long as the case is in the bankruptcy court," said an analyst from Mumbai-based Motilal Oswal Securities.
In a court filing on Monday, LyondellBasell thumbed down the Indian conglomerate's $15bn (€11bn) offer, saying the bid was not good enough for it to abandon its reorganisation plan.
Court hearings could be conducted on LyondellBasell’s reorganisation plan, which involves a conversion of $18bn debt into equity and a $2.55bn share offering, as early as Thursday.
"The rejection [of Reliance’s bid] may just be posturing. At present, there is no official document that shows that Reliance is out of the picture," said another analyst at a foreign investment bank in Mumbai.
It was not the first time that LyondellBasell had indicated its non-preference for taking in Reliance as partner, opting to craft a restructuring plan with the help of its creditors to emerge from bankruptcy.
"The Lyondell management was not in favour of Reliance. So they said that price was the issue. But there were definitely issues other than just that," the analyst at Motilal Oswal Securities said.
To Deepak Parikh of Angel Securities, Reliance’s chase for LyondellBasell in a bid to go global just ended and that the company may not pursue new acquisitions any time soon.
But the Indian conglomerate is seating in a pile of cash that would have to be invested somewhere, said the analyst from Motilal Oswal said.
($1 = €0.73)For more on LyondellBasell and Reliance visit ICIS company intelligence
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