Bankrupt Lyondell Chemical seeks court nod to pay non-US creditors

08 January 2009

Lyondell Chemical, the bankrupt US subsidiary of Dutch chemicals major LyondellBasell, has sought court permission to pay $350 million to overseas creditors to stave off supply cuts.

The company has appealed to a New York court for permission to pay $350 million to raw material suppliers overseas lest they cut off its access to raw materials or sue it.

Lyondell Chemical Co, which moved a bankruptcy court in Manhattan, received approval on Wednesday has access to $2.167 billion in interim debtor-in-possession financing, mostly from its existing lenders. It also received a $100 million emergency loan being provided by Citibank for a 2-day period.

The funds will allow the US units of LyondellBasell, the world's third-largest maker of petrochemicals products, to continue operations.

Hit by volatile oil prices and falling demand for petrochemical products, nearly 80 LyondellBasell outfits, including its US operations, have filed for Chapter 11 bankruptcy protection.

The company needed funds for working capital as also to repay over $1 billion in debt due over the next few weeks, its chief financial officer Alan Bigman told the court.