LyondellBasell moves to emerge from Chapter 11

Polymers manufacturer LyondellBasell Industries has reached an agreement with its unsecured creditors that might allow it emerge from Chapter 11.

According to LyondellBasell, the proposed agreement resolves objections by the Unsecured Creditor’s Committee to the company’s 2009 settlement of the estate’s claims against the parties who financed the 2007 leveraged buyout of Lyondell by Basell.

The new agreement increases the amount that will be distributed to the holders of general unsecured claims, the Millennium Bonds and 2015 Notes from US$300 million to $450 million. The additional US$150 million is to be paid in the form of reorganized equity.

In a statement, LyondellBasell said the dispute with the unsecured creditors has hampered the company’s ability to complete approval of the disclosure statement and Plan of Reorganization.

LyondellBasell filed Chapter 11 in January 2009. As part of the Chapter 11 process, LyondellBasell obtained approximately US$8 billion in debtor-in-possession (DIP) financing to fund continuing operations. The DIP financing includes two credit agreements: a US$6.5 billion term loan and a US$1.62 billion asset-based lending facility.