LyondellBasell Industries, the world’s largest polyolefins maker, has gained an additional owner in German investor Andreas Heeschen.Heeschen’s ProChemie Holding Ltd. has joined with LyondellBasell owner Access Industries to create ProChemie GmbH, a joint venture in which each side will own 50 percent equity in LyondellBasell.
Both sides “will support LyondellBasell’s restructuring process,” officials with the new Oberndorf, Germany-based JV said in a statement. The move will have no impact on LyondellBasell’s daily operations or on the Chapter 11 bankruptcy restructuring of its U.S. business, officials added.
LyondellBasell’s U.S. operations and one of its European holding companies filed for Chapter 11 bankruptcy protection in January, citing drastic drops in demand for plastics and chemicals. The firm is struggling with a massive $23 billion debt load connected to Basell NV’s $19 billion purchase of Lyondell Chemical Co. to form the new entity in late 2007. Access had purchased Basell for almost $6 billion in 2005.
Heeschen also is primary owner of firearms maker Heckler & Koch of Oberndorf. A spokeswoman said that Heeschen and ProChemie “sees value in LyondellBasell’s equity and in the chemical sector in general.”
New York-based Access is controlled by Russian-born billionaire Len Blavatnik, who in January said that LyondellBasell “is still very valuable if the economy recovers.”
Last month, officials with LyondellBasell — based in Rotterdam, the Netherlands — said it needed to cut $700 million in fixed costs by the end of 2010. It will do so by closing at least 10 manufacturing plants and 20 offices and research sites and by cutting 3,000 jobs.
Most recently, the firm announced the closing of a 480 million pound-capacity plant making high density polyethylene in Alvin, Texas. Since early 2008, LyondellBasell also has closed polypropylene plants in Sarnia, Ontario, and Varennes, Quebec, and LDPE plants in Bayport, Texas, and Fos-sur-Mer, France.
In a bankruptcy court affidavit, chemicals division President Edward Dineen said that the merger that created LyondellBasell was achieved using 100 percent debt financing. - Between this and the retained debt, the combined company began 2008 with a very substantial debt load - he said. - For the company to reduce its debt load, it was critical to have a strong first year to immediately begin reducing this debt level. This did not happen for a number of reasons.'
LyondellBasell is the world's largest maker of polyolefins. The company is the No. 1 maker of PP in North America and the world. The company also holds the No. 2 slot in both high and low density polyethylene in North America. LyondellBasell posted a loss of $7.3 billion on sales of $50.7 billion in 2008.
