LyondellBasell Industries announced today that, in order to facilitate a restructuring of its debts, its U.S. operations and one of its European holding companies have voluntarily filed to reorganize under Chapter 11 of the U.S. Bankruptcy Code. The company also announced that, pending Court approval, it has made arrangements for up to $8 billion in debtor-in-possession (DIP) financing to fund continuing operations. Of this total, $3.25 billion consists of new funding; $3.25 billion represents a refinancing of certain obligations under LyondellBasell's existing senior secured credit facilities; and $1.515 billion represents replacement of existing working capital facilities.
We have been working collaboratively with our creditors and our equity holder on a financial restructuring that reflects the realities of today's market environment and positions us for the future, said Volker Trautz, Chief Executive Officer.
During the past two quarters, we have seen a dramatic softening in demand for our products and unprecedented volatility in raw materials costs. December was particularly difficult, as many of our customers postponed orders to reduce their inventories. Though we currently anticipate this situation to be short-term and expect customers to increase their purchasing in 2009, we made the decision to file Chapter 11 in order to provide the company with the time and resources necessary to facilitate an orderly restructuring and position the business for the long term.
During the reorganization period, our goal is for the company to continue its operations and its relationships with customers and suppliers in the normal course, said Trautz.
The Chapter 11 filing applies to LyondellBasell's operations in the United States and one of its European holding companies, Basell Germany Holdings GmbH.
Trautz said that the company began taking steps to control costs as demand began to weaken and raw material costs started to fluctuate.
Over the past several months, we announced plans to significantly reduce headcount and also reduced capital expenditures and working capital, he said. We have also idled certain facilities and reduced production and processing at others. We are aggressively exploring additional ways to lower our costs and streamline operations in response to a very difficult global economic environment.
Our core businesses -- fuels, chemicals, plastics and technology -- are fundamental to the global economy, Trautz said. LyondellBasell's products are used in a broad range of applications and in numerous products including: transportation, fuels (gasoline and diesel), rigid and flexible packaging, plastic pipe, detergents, cosmetics, electronics, appliances, automotive parts, paints and coatings, furnishings, construction and building materials and many other industrial and consumer goods applications.
LyondellBasell's non-U.S. operating entities will continue to function independent of the Chapter 11 process. The U.S. companies filed for Chapter 11 protection in the Southern District of New York in Manhattan. A complete list of the filing entities and other information related to the Chapter 11 cases can be found through a link at the company's website, www.lyondellbasell.com. The company has also established a Restructuring Information Line, which is 866-964-5615, or in Houston, 713-309-4512. Outside the United States, callers can dial +1 713-309-4512 (English only).
| Susan Moore LyondellBasell Industries phone +1-713-309-4645 |
