LyondellBasell-creditor deal hampers RIL's acquisition plans
17 Feb 2010
LyondellBasell's agreement with lenders that settled a dispute over the financing of its leveraged buyout is likely to force Reliance Industries raise its offer for the European petrochemicals major or abandon its bid altogether.
LyondellBasell Industries on Tuesday reported an agreement with its unsecured creditors that settled claims against parties who financed the company's buy-out deal and paved the way for the company's emergence from bankruptcy (See: LyondellBasell says agreement with creditors clears way for bankruptcy exit).
The settlement involves payment of an additional $150 million in the form of reorganised equity to the unsecured creditors of the company.
The unsecured creditors, organised under the 'Creditors' Committee' had alleged that the management and secured creditors, such as Citibank and Deutsche Bank, had wrongfully brought about a cross-Atlantic merger that was 'engineered to fail.'
The group that has so far been supporting a Reliance takeover of LyondellBasell has backed out following a $150 million hike in the offer by LyondellBasell management.
LyondellBasell has already won over "a majority of its secured creditors in December by promising to convert all of their $18 billion debt into equity.
