Bankrupt petrochemicals maker LyondellBasell ACCELC.UL is planning a stock offering to raise funds so it can exit bankruptcy protection, according to documents filed with the bankruptcy court last week.

Lyondell, which was forced to seek bankruptcy in January amid a sudden cash crunch, filed its Chapter 11 reorganization plans with the New York bankruptcy court on Friday.

Under the reorganization plan, the company and its 94 bankrupt affiliates, will simplify its corporate structure and position the company to exit bankruptcy protection with significantly less debt.

LyondellBasell, was created out of a 2007 leveraged buyout led by New York-based investor Len Blavatnik's Access Industries, but it left the company with a heavy debt load.

During the bankruptcy the company put together one of the largest debtor-in-posession bankruptcy loans in history during a glut in the credit markets. Investors who put in $3.25 billion of new money into its bankruptcy loan, were also allowed to roll up $3.25 billion of existing senior-secured debt into the loan.

Under the reorganization plan filed with the court, LLyondell said it will repay administrative, tax and other priority claims in full and will repay the new money portion of its DIP loan in full. The holders of the rolled up portion of the DIP loan will receive new notes or cash in the full amount of their loan. The company's pre-bankruptcy senior lenders will receive new common stock in the reorganized company.

Lyondell's European debt will also be restructured under the plan and a litigation trust will be created to deal with a pending lawsuit that Lyondell's official creditors committee has brought against the banks, advisors and executives that put together the 2007 merger with Basell. The suit, which is scheduled to go to trial on Dec. 1, claims the $12.7 billion merger set Lyondell up to fail by loading the company with too much debt.

The company's reorganization plan is subject to a creditor vote and court approval. An initial court hearing on the company's reorganization plan is scheduled for Oct. 14, according to court papers.

The company hopes to obtain confirmation of its bankruptcy plan from the court in December and exit bankruptcy protection later this year or early in 2010.

The case is In re: Lyondell Chemical Co, U.S. Bankruptcy Court, Southern District of New York, No. 09-10023.

(Reporting by Emily Chasan and Chelsea Emery; editing by Andre Grenon)