RIL to acquire share in chemical giant LyondellBasell
There are speculations of acquisition of LyondellBasell by Indian petrochemical giant Reliance Industries. If it happens, this would bring in synergies to the existing business of RIL.
FIFTEEN MILLION shares at a discount broke the impact on the stock browsers were negative. But the speculation now is that the company has a bigger acquisition plan with the 660 million USD it raised.
According to some analysts and media of Europe and India, RIL is eyeing on LyondellBasell, a petrochemical conglomerate head quartered at Netherlands. The deal could be of $3 to 3.25 billion.
Reliance Industries has a market value of about $70 billion and is the most widely held stock by fund managers in India. The company has a cash of $4.6 billion and gross debt of $10.8 billion. With such a strong financials and cash raised from the proposed sale of treasury stock, the company's desire for aggressive growth via inorganic model is obvious.
LyondellBasell, currently in Chapter 11 bankruptcy protection can be a target. Integrated plants of the company and the products gel with the business plans of RIL.
The chemicals giant is currently putting together a rights offer, possibly for October, which will add liquidity to the firm. This year in February, LyondellBasell had secured finance of $8.1bn from various banks like Citigroup, Royal Bank of Scotland and Bank of America-Merrill Lynch. RIL may deal through these banks to acquire partial or full control of LB.
RIL can integrate its products as feedstock for LB, which it currently buys from Shell and Hoechst. LyondellBasell Industries is a refiner of crude oil and major producer of gasoline blending components and polymers, including polyolefins and advanced polyolefins.
LyondellBasell has submitted its plan of emergence from chapter 11 to the Bankruptcy court on September 11, and the final hearing is likely to be held in the mid of October. After the submission of the plan the spokesman of the LB had told media that they were on schedule to emerge out of chapter 11 with a more viable business partner with a solid capital structure. Though nothing was mentioned about the business partner but the speculations are that it can be Reliance Industries.
Reliance Industries has a market value of about $70 billion and is the most widely held stock by fund managers in India. The company has a cash of $4.6 billion and gross debt of $10.8 billion. With such a strong financials and cash raised from the proposed sale of treasury stock, the company's desire for aggressive growth via inorganic model is obvious.
LyondellBasell, currently in Chapter 11 bankruptcy protection can be a target. Integrated plants of the company and the products gel with the business plans of RIL.
The chemicals giant is currently putting together a rights offer, possibly for October, which will add liquidity to the firm. This year in February, LyondellBasell had secured finance of $8.1bn from various banks like Citigroup, Royal Bank of Scotland and Bank of America-Merrill Lynch. RIL may deal through these banks to acquire partial or full control of LB.
RIL can integrate its products as feedstock for LB, which it currently buys from Shell and Hoechst. LyondellBasell Industries is a refiner of crude oil and major producer of gasoline blending components and polymers, including polyolefins and advanced polyolefins.
LyondellBasell has submitted its plan of emergence from chapter 11 to the Bankruptcy court on September 11, and the final hearing is likely to be held in the mid of October. After the submission of the plan the spokesman of the LB had told media that they were on schedule to emerge out of chapter 11 with a more viable business partner with a solid capital structure. Though nothing was mentioned about the business partner but the speculations are that it can be Reliance Industries.
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