The past 15 months have been an expensive lesson for those debt-holders who financed Basell’s purchase of Lyondell in July 2007, at the peak of the market.
LBI entered Chapter 11 with $24bn of debt. It will now exit with just $5.2bn of net consolidated debt. Holders of senior secured debt will receive 93% of the new Class A shares in exchange for their claims. The value of these will depend on the outcome of LBI’s proposed IPO in Q3. Most other original lenders are wiped out.
LBI is the world’s 3rd largest independent chemical company, with 2009 sales of $30.8bn. Its predecessors, Lyondell and Basell, were also excellent companies. This has been demonstrated by the way in which employees have maintained their morale during an immensely difficult time. The blog congratulates them, and LBI itself, on their successful exit.