LyondellBasell files for Chapter 11 protection

The US operations of LyondellBasell Industries, plus one of its European holding companies, have filed for voluntary reorganisation under Chapter 11 of the US Bankruptcy Code.

The move results from a “dramatic softening in demand” for the company’s products and “unprecedented volatility in raw material costs”, according to CEO Volker Trautz.

“We are aggressively exploring additional ways to lower our costs and streamline operations in response to a very difficult global economic environment,” he also said.

The company also announced that, pending bankruptcy court approval, it has made arrangements for up to $8bn in debtor-in-possession financing to fund continuing operations.

Of this total, $3.25bn consists of new funding $3.25bn represents a refinancing of certain obligations under LyondellBasell’s existing senior secured credit facilities, and $1.5bn represents replacement of existing working capital facilities.

“We have been working collaboratively with our creditors and our equity holder on a financial restructuring that reflects the realities of today’s market environment and positions us for the future,” Trautz said.

The Chapter 11 filing applies to LyondellBasell’s operations in the US and one of its European holding companies, Basell Germany Holdings.