By OGJ editors
HOUSTON, Jan. 8 -- LyondellBasell Industries has filed for reorganizational bankruptcy for its US operations and Basell Germany Holdings. The filing does not include LyondellBasell's other companies outside the US.
The US companies filed for Chapter 11 protection in the Southern District of New York in Manhattan on Jan. 6.
During Jan. 8 court proceedings, executives said LyondellBasell needed immediate funds to pay more than $1 billion in debt and had run out of cash to finance operations.
US Bankruptcy Judge Robert Gerber approved the company's request to access $2.167 billion in interim debtor-in-possession financing from a group of lenders and also approved a separate $100 million super priority emergency loan being provided by Citibank.
"During the past two quarters, we have seen a dramatic softening in demand for our products and unprecedented volatility in raw materials costs," Volker Trautz, LyondellBasell chief executive officer, said in a company news release.
He said December was "particularly difficult, as many of our customers postponed orders to reduce their inventories." LyondellBasell expects its economic crunch will be short term and expects customers to increase their purchasing in 2009.
Trautz called LyondellBasell's core businesses of fuels, chemicals, plastics, and technology "fundamental to the global economy."
LyondellBasell Industries is based in The Netherlands and privately owned by Access Industries, founded in 1986 by US industrialist Leonard Blavatnik.
Basell International Holdings paid $12.7 billion for Houston-based Lyondell Chemical last year.