Alexa
  • Directory of Taiwan

LyondellBasell denies it has defaulted on loans

LyondellBasell denies it has defaulted on loans

The world's third-largest independent chemical company has denied reports it defaulted on millions in loans.
LyondellBasell Industries AF was downgraded Tuesday by credit ratings agencies Standard & Poor's and Moody's. It is just the latest major chemical producer to stumble because of volatile energy prices.
The company was formed in 2007 when Dutch chemical company Basell International Holdings BV paid $12.7 billion to buy Houston-based Lyondell Chemical Co. Earlier this month the Netherlands-based company said in a filing with the Securities and Exchange Commission that several lenders have allowed it to postpone $160 million in loan payments.
That led S&P to cut its long-term corporate credit rating to "SD," or "selective default," from "B-," a junk rating.
S&P said a restructuring of the company's "complex multitiered" 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."
Moody's lowered its corporate family rating on LyondellBasell to "Caa2," its fourth-worst junk rating, from "B3."
"A challenging operating environment in the current quarter and likely sustained weakness in demand at the beginning of the year will likely further restrict the headroom under some of the company's financial covenants," Moody's said.
Yet LyondellBasell stressed it is "not currently in default according to its agreements with its lenders."
"Standard & Poor's definition of 'selected default' related to our corporate credit rating should not be misinterpreted to suggest that LyondellBasell is currently in default of its bank agreements," the company said in a statement.
A company representative was not immediately available for further comment.
The Lyondell buyout in 2007 came just as energy costs began a rapid ascent to nearly $150 per barrel, prices that substantially squeezed margins. But even as prices for oil and other commodities have dropped sharply, LyondellBasell and its peers are facing a substantial decline in consumer demand amid the global economic recession.
LyondellBasell has hired bankruptcy lawyers and is trying to raise as much as $2 billion in financing, according to a report in The Wall Street Journal. A bankruptcy protection filing may be near, the newspaper said in a report published late Tuesday on its Web site. Debt related to the purchase is weighing on the company as sales decline amid a weakening economy, the newspaper said.
LyondellBasell has annual sales of $54.6 billion and more then 16,000 employees across the globe, according to its Web site.
Elsewhere, LyondellBasell said Wednesday it will add 42 jobs to its suburban Wilmington, Delaware, operations. The Delaware Economic Development Office has awarded the firm with a $126,000 grant for the expansion. If the company sheds any employees within 7 years, the state could recover the money.


Updated : 2021-07-31 12:04 GMT+08:00