AMSTERDAM - Bankrupt petrochemicals company LyondellBasell has filed an amended reorganisation plan with a U.S. court proposing a $2.8 billion rights issue as it awaits a possible bid from Indian Reliance Industries.

Lyondell, which sought bankruptcy protection in January amid a sudden cash crunch, filed an amended Chapter 11 reorganisation plan on Friday in the U.S., planning to simplify its corporate structure and exit bankruptcy protection with significantly less debt.

During the bankruptcy the firm put together one of the largest debtor-in-possession (DIP) 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 new reorganisation plan, Lyondell will pay a maximum of $428 million in administrative, tax and other priority claims and repay the new money portion of its DIP loan in full, except excluded DIP obligations.

The holders of the rolled up portion of the DIP loan will receive new notes, while pre-bankruptcy senior lenders would be entitled to a pro rata share of 300 million shares of new common stock in the reorganised company and the right to purchase additional shares of stock via a $2.8 billion rights issue.

The debtors believe that acceptance of the plan ... is in the best interests of the debtors' estates, their creditors and all other parties in interest. Accordingly, the debtors recommend that you vote in favor of the plan, LyondellBasell said in the plan.

LyondellBasell spokesman David Harpole said the next step would be setting a date for a court hearing to confirm the disclosure statement and then to seek creditor and shareholder approval of the plan via a separate process.


In November, Reliance Industries made a cash offer for Lyondell reportedly worth $10 billion to $12 billion and LyondellBasell said it would consider the Reliance offer as a potential alternative to maximise investor return.

In the amended reorganisation plan, LyondellBasell said it continues to evaluate the Reliance proposal, adding if debtors choose to pursue a deal with Reliance, payment of any break-up fee to the rights offering sponsors will not be required.

Spokesman Harpole added the reorganisation plan will not preclude Reliance from making a bid if it chooses to do so.

A court hearing on the amended reorganisation plan will not be held, however, until after a February court hearing on the validity of a settlement with Lyondell Chemical Co's creditors.

That settlement relates to a $22 billion lawsuit launched by Lyondell Chemical Co's creditors against the banks and advisers who put together Lyondell's leveraged buyout of Basell in 2007.

Lyondell's unsecured creditors had sued the lenders and advisers who put together the 2007 deal contending that the buyout of Lyondell by Basell left the company doomed to fail, but reached a settlement with LyondellBasell earlier this month.

Lyondell's official creditors committee has questioned whether the company was truly able to make this settlement, and is expected to challenge the validity of the settlement at a court hearing next year.

LyondellBasell has $25.7 billion in consolidated debt and plans to cancel under the reorganisation plan $18.7 billion in debt, to give it proforma debt of $7.2 billion when it emerges from chapter 11 protection next year. (Additional reporting by Emily Chasan and Chelsea Emery in New York; Editing by Rupert Winchester)