By Jeran Wittenstein and Tiffany Kary March 12 (Bloomberg) — Lyondell Chemical Co. plans to borrow $3.25 billion to repay some existing debt after it emerges from bankruptcy protection. The chemical maker, based in Houston, plans to sell senior secured bonds and borrow through a senior term loan, according to a statement distributed by PRNewswire. It also plans to raise $2.8 billion in a rights offering. Lyondell said March 8 that its plan to reorganize by repaying its $8 billion bankruptcy loan and giving an equity stake in the new company to lenders is a better deal for creditors than a $14.5 billion purchase offer by India-based Reliance Industries Ltd. U.S. Bankruptcy Court Judge Robert Gerber in Manhattan yesterday approved Lyondell’s reorganization terms valuing the company at $15.2 billion over the objections of a group of lenders. Gerber said Lyondell’s disclosure statement has enough information about how the company is valued, paving the way to the company’s planned April 30 exit from bankruptcy. Gerber also approved a settlement among unsecured creditors and senior lenders over Lyondell’s $22 billion buyout in 2007. The group of lenders, who said the company was being undervalued, said backers of the rights offering — Access Industries Holdings LLC, Apollo Management LP and Ares Corporate Opportunities Fund III — could benefit from an artificially low valuation by getting stock at a discount. Bank lenders would also benefit from a low valuation because they could be overpaid on their claims, and management would get stock at a lower price too, lawyers for the group said in court documents. Bridge Loans Lyondell characterized the objectors as a small group that held only about $250 million, or 2.6 percent, of the bridge loans. David Harpole , a Lyondell spokesman, didn’t immediately return a voicemail message seeking comment after regular business hours yesterday. The proceeds from the sale of the notes, together with the loan and a new European securitization facility, will be used to repay debts including the chemical maker’s debtor-in-possession loan and an existing European securitization facility. The case is In re Lyondell Chemical Co., 09-10023, U.S. Bankruptcy Court, Southern District of New York (Manhattan). To contact the reporters on this story: Jeran Wittenstein at jwittenstei1@bloomberg.net ; Tiffany Kary in New York at tkary@bloomberg.net .
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Lyondell Will Pursue $3.25 Billion of Debt Financing After Bankruptcy Exit
