LyondellBasell Industries, the world’s largest polyolefins maker, plans to exit bankruptcy in December or January.After exiting bankruptcy, the Netherlands-based firm plans to have an equity offering and become a publicly traded firm, spokesman David Harpole said in an October 6 phone interview. That offering is expected to take place sometime in 2010.
- We’ve met all of our milestones to date - Harpole said. - We’re on schedule and are continuing to work with our lenders. LyondellBasell also has accomplished about 40% of its job reduction goal, but plans to cut another 1,800 positions worldwide by the end of 2010. Most recently, the firm cut 14 jobs at a plant in Corpus Christi, Texas, that makes plastic feedstocks ethylene, propylene, butadiene and benzene. Closing a low density polyethylene plant in Carrington, UK by the end of the year will eliminate 50 jobs.
The firm also had planned to close a high density PE plant in Alvin, Texas, but reversed its decision after the plant’s finance improved and HDPE demand bounced back somewhat.
Harpole declined to provide site-by-site details, but he said the overall goal of 3,000 reductions announced in November 2008 represented about 17% of LyondellBasell’s global work force at the time.
“That doesn’t mean it’s going to be 17% of the jobs at each location - explained Harpole, who is based at the firm’s North American headquarters in Houston. - Some locations could see more than that and some could see less.
In an October 6 teleconference, officials with the firm said that earnings for its polymers segment through August — before interest, taxes, depreciation amortization and restructuring costs — were $528m. That’s 75% higher than what the firm expected the polymers unit to produce at this point at the start of the year. Through August, polymers was the most productive of LyondellBasell’s four segments, based on pre-charge earnings.
In the first half of 2009, LyondellBasell’s sales fell 53% to $13.2bn versus the year-ago period. The firm posted a first-half loss of $1.4bn after showing a $5m profit in the same period a year ago. In 2008, LyondellBasell posted a loss of $7.3bn on sales of $50.7bn.
Ownership of LyondellBasell is split 50-50 between investment firms Access Industries of New York and ProChemie Holding of Oberndorf, Germany. Access bought Basell from BASF and Royal Dutch/Shell Group for $6bn in 2005, and then acquired Lyondell Chemical for $19bn in 2007. In bankruptcy court filings in New York, LyondellBasell officials have said that the acquisition of Lyondell was done with 100% debt financing.
Global economic turmoil and lower plastics and chemicals demand hit LyondellBasell hard in 2008, leading many of its units to file for bankruptcy in January of this year. Access then sold half of the business for an undisclosed amount to ProChemie in May.
LyondellBasell ranks as the largest maker of polypropylene in both North America and the world. In North America, the firm also ranks second in markets for HDPE and LDPE.
