LyondellBasell Industries AF SCA, the world's largest polyolefins maker, has gained an additional owner in German investor Andreas Heeschen.
Heeschen's ProChemie Holding Ltd. has joined with LyondellBasell's owner, New York-based Access Industries, to create ProChemie GmbH, a joint venture in which each side will own 50 percent equity in LyondellBasell.
Both sides will support LyondellBasell's restructuring process, officials with the new Oberndorf, Germany-based joint venture, said in a statement. The move will not affect LyondellBasell's daily operations or on the Chapter 11 bankruptcy restructuring of its U.S. business, officials added.
LyondellBasell's U.S. operations and one of its European holding companies filed for Chapter 11 bankruptcy protection in January, citing drastic drops in demand for plastics and chemicals. The firm is struggling with a massive, $23 billion debt load connected to Basell Holdings BV's $19 billion purchase of Lyondell Chemical Co. to form the new entity in late 2007. Access paid almost $6 billion for Bassell in 2005.
Heeschen also is primary owner of firearms maker Heckler & Koch GmbH, also of Oberndorf.
Heeschen, along with ProChemie, sees value in LyondellBasell's equity and in the chemical sector in general, according to a spokeswoman.
Access is controlled by billionaire Len Blavatnik, who in January said LyondellBasell is still very valuable if the economy recovers.
Last month, LyondellBasell officials said the Rotterdam, Netherlands-based firm needed to cut $700 million in fixed costs by the end of 2010. It will do so by closing at least 10 plants and 20 offices and research sites, and by cutting 3,000 jobs.
Most recently, the firm said it will close a 480 million-pound-capacity plant making high density polyethylene in Alvin, Texas. Since early 2008, LyondellBasell also has closed polypropylene plants in Sarnia, Ontario, and Varennes, Quebec; and low density PE plants in Bayport, Texas, and Fos-sur-Mer, France.
In a bankruptcy court affidavit, chemicals division President Edward Dineen said the merger that created LyondellBasell used 100 percent debt financing.
Between this and the retained debt, the combined company began 2008 with a very substantial debt load, he said.
For the company to reduce its debt load, it was critical to have a strong first year to immediately begin reducing this debt level. This did not happen for a number of reasons.''
LyondellBasell is the No. 1 maker of PP in North America and the world. It is No. 2 in both HDPE and LDPE in North America.
LyondellBasell posted a loss of $7.3 billion on sales of $50.7 billion in 2008.