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Bankruptcy Court confirms LyondellBasell reorganization plan

24
Apr '10
The United States Bankruptcy Court for the Southern District of New York confirmed LyondellBasell's Plan of Reorganization. The Plan received broad-based support from virtually all creditor classes entitled to vote on the Plan. LyondellBasell affiliates currently in voluntary reorganization are projected to emerge from Chapter 11 protection on April 30, 2010.

"We are extremely proud to announce that in the short period of 15 months, LyondellBasell is poised to exit from Chapter 11," said Jim Gallogly, LyondellBasell's Chief Executive Officer. "We are equally grateful to our creditors for the confidence they have expressed in our reorganization by voting overwhelmingly to support our plan, and to our customers and our suppliers for their support during this unprecedented period in our history.

"We emerge from Chapter 11 as a stronger company and business partner. Our industry-defining technologies, global reach and focus on operational excellence will provide LyondellBasell with a bright future," Gallogly said. "Through this reorganization we have solidly positioned the company to be an industry leader with a significantly improved balance sheet, excellent liquidity, a more efficient organizational structure, and a new management team."

Sound Capitalization and Lower Debt
In conjunction with the emergence from Chapter 11, LyondellBasell raised $3.25 billion of first priority debt, including $2.25 billion and Euro375 million offerings of senior secured notes in a private placement and borrowings of $500 million under a senior term loan facility as part of its exit financing. The net proceeds from the sale of the notes, together with borrowings under the term loan, a new European securitization facility, and proceeds from a $2.8 billion rights offering, will be used to repay and replace certain existing debt, including debtor-in-possession credit facilities and an existing European securitization facility, and to make certain related payments.

Upon emergence from Chapter 11, the company expects to have approximately $7.2 billion of total consolidated debt and approximately $5.2 billion of net consolidated debt, including approximately $2 billion of cash and cash equivalents. There will also be approximately $2.4 billion of lending commitments under an asset backed lending facility in the U.S.and a European revolving trade accounts receivable securitization, of which approximately $1 billion will be undrawn at emergence. When LyondellBasell filed for Chapter 11, it had consolidated debt of approximately $24 billion.

"Our reorganization plan significantly de-levers our capital structure," Gallogly said.

Plan Distributions
Under the Plan, administrative and priority claims, as well as the new money debtor-in-possession (DIP) financing will receive payment in full. DIP roll-up lenders will be issued new notes in the same principal amount. Holders of senior secured claims will receive approximately 93 percent of the Class A shares of the new holding company in exchange for their claims. Most allowed general unsecured claims will receive a pro-rata distribution of cash and Class A shares under the terms of a settlement among LyondellBasell and its creditor constituencies. Holders of subordinated claims, securities claims and equity claims will not receive or retain any interest or property under the Plan of Reorganization.


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