By Malini Hariharan
LyondellBasell's aggressive moves to convince creditors to approve its own reorganisation plan have drawn a reaction from Reliance Industries.
A source familiar with developments confirms that Reliance has raised its valuation of LyondellBasell to $13.5bn, up from $12bn and a letter has been sent to LyondellBasell.
But the Wall Street Journal reports that the LyondellBasell's board has rejected Reliance's latest offer as they deem it to be too low. LyondellBasell's own reorganisation plan has valued the enterprise at $15.5bn.
"Reliance has a valuation in mind and there is no point in quoting this on day one. The strategy is to start low and see what happens," says the source.
Reliance is also looking at participating in a $2.8bn equity issue that LyondellBasell has outlined as part of its reorganisation plan.
Does this then mean that Reliance would be willing to join hands with Access Industries and/or settle for a minority stake?
The source would only say that it is a fluid situation. " Reliance will be playing it by the ear," he says.
LyondellBasell has said that it has received substantial creditor support for its plan to reorganise the company and come out of US bankruptcy protection.
But the source stresses that unsecured creditors are not happy as they are getting virtually nothing.