Global petrochemical major LyondellBasell today said it has received creditors' support for the restructuring plan, which will help the company to come out of bankruptcy.
Indian conglomerate Reliance Industries is bidding for a majority stake in LyondellBasell and both companies had entered into a preliminary non-binding offer.
The petrochemical firm has filed a motion in the US bankruptcy court to settle various claims from creditors.
LyondellBasell has sought the court's approval for Lender Litigation Settlement, Equity Commitment Agreement (ECA) and Plan Support Agreement (PSA), it said in a statement.
Under the ECA, a group consisting of an affiliate of Apollo Management VII, LP; an affiliate of Access Industries; and Ares Corporate Opportunities Fund III, LP have agreed to backstop the equity rights offering contemplated by the restructuring plan.
The entity which backstops takes the risk of supporting the valuation of shares even if the scrips trade below the backstopped price.
"The plan contemplates that an aggregate of $2.8 billion will be raised through the purchase of equity contemporaneously with emergence from Chapter 11," it added.
Moreover, the ECA does not prohibit the company from "considering other bona fide proposals it may receive with respect to the purchase of its equity upon emergence".
According to the statement, the PSA represents an agreement with holders of majority of LyondellBasell's senior and bridge debt to support the restructuring plan.
The petrochemcial company and RIL late last month disclosed a "preliminary non-binding offer" by the Indian company for taking a controlling interest in the world's third-largest independent chemical maker. Going by industry sources, RIL's bid could be more than $12 billion.
LyondellBasell's US operations and one of its European holding companies filed for Chapter 11 bankruptcy protections this year, bogged down by a massive debt load and declining demand.
The Netherlands-headquartered company, which is based in the US, is privately owned by ProChemie GmbH, a joint venture of Access Industries and ProChemie Holding.
