Bankruptcy an option for chemical giant LyondellBasell
LyondellBasell Industries, the world''s third-largest independent chemical company, said that it its considering bankruptcy protection as a broadening recession eats away at consumer demand, according to the Associated Press. The company is controlled by Russian billionaire Len Blavatnik, who serves as chairman. Blavatnik is also one of several wealthy Russian investors involved earlier this year in a fight for control over TNK-BP, a joint venture with the British oil company BP PLC. LyondellBasell''s problems come just a year after Basell International Holdings paid $12.7 billion for Houston-based Lyondell Chemical, taking on an enormous debt load shortly before credit markets dried up. The deal that formed the company was struck just as crude oil began its rapid ascent to nearly $150 per barrel over the summer, prices that squeezed margins for all chemical makers. But a broadening recession slashed demand both for the products the industry makes and the energy prices that led to a consolidation in the industry in the first place. In a filing with the Securities and Exchange Commission the company said that several lenders have allowed it to postpone $160 million in loan payments. Standard & Poor''s Ratings Services downgraded the company''s long-term corporate credit rating to junk status and Moody''s lowered LyondellBasell''s corporate family rating to "Caa2," its fourth-worst junk rating. S&P said a restructuring of the company''s debt could lead to "substantial principal losses for some creditors, especially nonsenior lenders, which will be tantamount to a default under our criteria and definition." LyondellBasell denied that it had defaulted on any debt.