Citigroup in $1.4bn loss over LyondellBasell
Global chemical manufacturer LyondellBasell — the third-largest private chemical company in the world — has collapsed. The firm filed for Chapter 11 bankruptcy protection in the United States, as well as the Dutch equivalent. They had failed to meet a January 4 deadline on postponed debt payments, and talks with creditors failed.
Headquartered in The Netherlands, LyondellBasell is owned by private equity tycoon Len Blavatnik, who had already refused the company a loan to help deal with debt resulting from a $12.7 billion merger between Basell International Holdings and Lyondell Chemical to create LyondellBasell Industries.
The company had already appointed Kevin McShea from Alix Partners to restructure the firm. McShea was assigned speculatively prior to the bankruptcy filing. Access Group, Blavatnik’s company, refused to extend credit as part of a loan deal brokered in March, a decision Lyondell Chemicals Company, a subsidiary of LyondellBasell, stated they were unhappy with.
On Thursday, an interim allowance was made by a judge for LyondellBasell to seek up to $2.167 billion of loans. There is also an emergency loan paid out of $100 million. As well as LyondellBasell, 79 affiliates have become insolvent. Citigroup has said the collapse will set them back $1.4 billion in unpaid debts.