Lyondell reshuffle plan approved

New York (Bloomberg) LyondellBasell Industries AF and units including Lyondell Chemical Company won permission to reorganise and exit bankruptcy with $7.2 billion (Dh26.4 billion) in debt and about $10 billion in equity value, after a judge overruled objections to an environmental settlement.

US Bankruptcy Judge Robert Gerber approved the Chapter 11 plan on Friday in Manhattan, at a hearing in which he also approved a settlement that resolves US government claims for more than $5.5 billion in environmental damage. Lyondell plans to exit court protection by April 30, lawyer George Davis told Gerber. The company's consolidated debt of $7.2 billion compares with $24 billion before it filed for bankruptcy, Davis said.

After a lawyer asked him whether he would confirm the plan following resolution of the final objections, Gerber said, "Yes, I feel like someone has just asked me to get married."

Approval

Gerber's approval is the final stage needed to pave Lyondell's exit from a bankruptcy complicated by disputes over its 2007 buyout, environmental liabilities and interest from India-based Reliance Industries Limited. Gerber said March 8 that Lyondell's plan to repay its $8 billion bankruptcy loan and give an equity stake in the new company to lenders is a better deal for creditors than Reliance's $14.5 billion buyout bid.

The reorganisation of the third-largest independent chemical company in the world was a "resounding success", especially considering that Lyondell had only 15 days worth of money left when it hired bankruptcy lawyers to file its Chapter 11 case, Davis said. The Netherlands-based company will trade on the New York Stock Exchange before the end of the year, Davis said.

"We emerge from Chapter 11 as a stronger company and business partner," LyondellBasell Chief Executive Officer Jim Gallogly said Friday in a statement. "Through this reorganisation we have solidly positioned the company to be an industry leader with a significantly improved balance sheet, excellent liquidity, a more efficient organisational structure, and a new management team."