By Michael Lauzon, Plastics News
Resins and chemicals giant LyondellBasell Industries is considering filing for Chapter 11 bankruptcy protection.
"We are looking at restructuring our debt and are exploring all of our options," the company said in 31 Dec 2008 news release. "Filing for Chapter 11 protection is one of those options. We are working collaboratively with our banks to find the most efficient way to restructure." Spokeswoman Susan Moore said the company would not comment beyond the release.
The Wall Street Journal, citing unnamed sources, said Access Industries, the New York-based firm that owns LyondellBasell, has hired law firm Skadden, Arps, Slate, Meagher & Flom as a bankruptcy adviser. LyondellBasell has hired Cadwalader, Wickersham & Taft as its bankruptcy counsel. The report said LyondellBasell wants to get up to $2billion in bankruptcy financing.
LyondellBasell was formed in 2007 when Basell International Holdings paid $12.7 billion to buy Lyondell Chemical of Houston. In February, the company added to its compounding capacity with the purchase of US Solvay Engineered Polymers, a major polypropylene compounder. However, in recent months, Netherlands-based LyondellBasell has been hurt by a decline in chemical prices while it carries a heavy debt load.
The firm stressed in a 30 Dec news release that it was not in default of its bank agreements. The statement was a response to a Standard & Poor's news release indicating LyondellBasell was in selective default to its corporate credit rating. The ratings agency has therefore downgraded the firm's credit rating.
LyondellBasell is the world's largest manufacturer of polyolefins. The company is the leading maker of PP in the world. The company also holds the number two slot in both high and low density polyethylene in North America.
In polyurethanes, the group is a major producer of propylene oxide, used to make polyols, propylene glycols and propylene glycol ethers. LyondellBasell has about 2100 kilotonnes per annum capacity for PO at two plants in the US, three in Europe and a joint venture in Japan.