In what could throw a spanner in Reliance Industries? plans to acquire Dutch petrochemicals major LyondellBasell Industries (LB), the latter said on Tuesday that an agreement has been reached that will help pave the way for LyondellBasell?s emergence from Chapter 11. In November, Reliance Industries made a cash offer for Lyondell reportedly worth $10 billion to $12 billion and LyondellBasell said it would consider the Reliance offer as a ?potential alternative? to maximise investor return.
The proposed agreement, which remains subject to court approval, final internal approval and final documentation, resolves objections by the Unsecured Creditor?s Committee to the company?s settlement of the estate?s claims against the parties who financed the 2007 leveraged buyout of Lyondell by Basell. That settlement was announced in December 2009.
?The new agreement increases the amount that will be distributed on the effective date of the plan to the holders of general unsecured claims, the Millennium Bonds and 2015 Notes from $300 million to $450 million. The additional $150 million is to be paid in the form of reorganised equity which will be funded by reduction in distributions to the holders of senior secured facility and bridge loan claims under the plan,? LB said in a statement. The dispute between the unsecured creditors and these defendants has been limiting LyondellBasell?s ability to complete approval of the disclosure statement and plan of reorganisation. It is anticipated that this can be accomplished soon, the release added. As part of the new agreement, the Unsecured Creditor’s Committee, substantial holders of the senior debt and bridge debt and the 2015 Notes Trustee have agreed to support LyondellBasell’s Plan.