LyondellBasell goes from bankruptcy to the S&P 500

Author: Al Greenwood


By Al Greenwood

HOUSTON (ICIS)--It took LyondellBasell a little more than two years to go from leaving bankruptcy protection to joining the S&P 500.

LyondellBasell replaced Sears in the S&P 500 on Tuesday after the markets closed.

The milestone was the latest for the company, whose stock has risen substantially since its debut on the New York Stock Exchange on 14 October 2010.

Then, the stock closed slightly above $27/share. Now, it stock trades near $47/share.

Not only has the company introduced a dividend, it has increased it several times, from 10 cents/share to 40 cents/share.

The higher dividends and stock prices come as LyondellBasell enjoys a feedstock advantage brought on by the advent of shale gas in the US.

To make the most of that feedstock advantage, LyondellBasell is increasing its ethylene capacity by 850m lb/year (390,000 tonne/year) at La Porte, Texas, and increasing its ethane consumption by 500m lb/year at Channelview, Texas.

Also, LyondellBasell plans to restart its 780,000 tonne/year methanol plant.

Before the expansion plans and dividends, LyondellBasell had emerged from one of the biggest bankruptcy cases in the US chemical industry, but one that was also brief at 16 months.

The following lists some of the major events from LyondellBasell's creation in 2007 to it joining the S&P 500.

4 September 2012: LyondellBasell joins S&P 500

30 April 2012: LyondellBasell discusses US condo cracker with potential partners

8 December 2011: LyondellBasell plans to increase ethane consumption at Channelview plant by 500m lb/year

8 December 2011: LyondellBasell plans to increase ethylene capacity by 850m lb/year at La Porte site

8 December 2011: LyondellBasell plans to restart 780,000 methanol plant in Texas

25 November 2011: LyondellBasell declares a special dividend of $4.50/share

29 July 2011: LyondellBasell celebrates first year out of bankruptcy protection with a 21% rise in net income

5 May 2011: LyondellBasell starts paying a 10-cent/share dividend. The company would subsequently increase the dividend until its current 40 cents/share

14 October 2010: LyondellBasell's shares close higher during their debut on the New York Stock Exchange

30 April 2010: LyondellBasell leaves Chapter 11 bankruptcy protection

23 April 2010: A US bankruptcy court confirms LyondellBasell’s reorganisation plan, which includes a court-approved equity offering, several settlements with creditors and environmental regulators and a plan to be listed on the New York Stock Exchange (NYSE)

11 March 2010: A US bankruptcy court approves a string of motions critical to LyondellBasell’s reorganisation plan, including its disclosure statement, a $450m (€360m) partial settlement with creditors and its equity offering. Afterward, LyondellBasell announces plans to raise $3.25bn through a combination of private placement of secured notes and term loans as it prepares to emerge from bankruptcy protection. The fresh funds would be used to partly repay existing debts

8 March 2010: LyondellBasell rejects a $15bn takeover bid from India’s Reliance Industries, concluding it was neither higher nor better than its reorganisation plan 

9 April 2009: LyondellBasell announces additional plant closures worldwide as part of a plan to lift cost savings by $700m and successfully emerge from bankruptcy protection

6 January 2009: The US operations of LyondellBasell and one of its European companies file for bankruptcy protection in the US, listing debts of $19bn and assets of $27bn

20 December 2007: Lyondell Chemical and Basell complete their $19.4bn merger, forming LyondellBasell Industries – the third-largest independent chemical company in the world

($1 = €0.80)