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MUMBAI/NEW YORK  - LyondellBasell filed a restructuring plan on Monday, rejecting a takeover bid from Reliance Industries Ltd in favour of commitments from private equity firms, including Apollo Management LP, to help the chemicals maker exit bankruptcy.

 

Lyondell filed for bankruptcy more than a year ago, hobbled by billions in debt, a sharp increase in oil prices and a decline in demand for its polymers and chemicals due to the global economic crisis.

 

Since then, LyondellBasell has reached agreement with its creditors to shed billions in debt, issue equity to debtholders and raise about $2 billion to finance its bankruptcy exit.

 

"We will have a new management team in place, we will have considerably less debt, and we will be adequately capitalized with the equity from the rights offering as well as exit financing," said company spokesman David Harpole. "We will be a much leaner, more efficient company and a stronger competitor in the global chemical and polymers industry."

 

The company has rejected several offers from Reliance Industries, the most recent of which valued the petrochemicals firm at $14.5 billion, in favour of a plan supported by key creditor groups, said Harpole.

 

"The amended plan provides superior value, improves the financial stability of the reorganized company and is a confirmable plan," said Harpole.

 

The company in February reached a $450 million settlement with unsecured creditors over a lawsuit stemming from its 2007 leveraged buyout. The settlement helped clear the way for the company to put the final touches on its reorganization plan.

Bankrupt petrochemicals firm LyondellBasell outlined a restructuring plan that it said was a better option than a $14.5 billion bid from Indian energy major Reliance Industries, court documents showed.

 

Reliance's offer was not sufficiently valuable to abandon the reorganisation plan, Luxembourg-headquartered Lyondell said in a disclosure statement lodged with a U.S. bankruptcy court on Monday.

 

A person familiar with the matter told Reuters last Tuesday that Lyondell had rejected Reliance's offer.

 

If the court approves Lyondell's disclosure statement than the plan would be sent to the company's creditors for their approval.

 

As part of its reorganization plan, Lyondell said it will sell 263.9 million Class B shares, most of which will be sold in a rights offering backstopped by private equity firms Apollo Management, Ares Management and Access.

 

Apollo can invest up to $1.52 billion, while Ares can invest up to $475.7 million and Access can invest up to $805.9 million, the court documents show.

 

Apollo will have the right to nominate three initial supervisory board members, while Access and Ares will have the right to nominate one initial supervisory board member, court filings show.

 

Lyondell will seek to list its shares on the New York Stock Exchange once the reorganization plan becomes effective.

 

Hearing on the disclosure statement are due on Thursday.

 

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MUMBAI (Reuters) - Mukesh Ambani, India's richest man, is faced with a prospect he has only rarely encountered: not getting what he wants.

After months in pursuit of LyondellBasell, Ambani's Reliance Industries appears set to fall short in a takeover bid valuing the petrochemicals group at $14.5 billion. Instead, Luxembourg-based Lyondell is poised to file a reorganisation plan that may lead it out of bankruptcy.

Ambani, whose net worth was estimated at $32 billion by Forbes in November, is likely to treat this as a small setback in his quest to build a presence outside India, where his conglomerate is the biggest listed company and his family stands alongside the Tata clan at the pinnacle of the corporate elite.

Mukesh Ambani, 52, is the eldest son of Reliance's late founder Dhirubhai, a school teacher's son whose rise from Gujarat inspired a Bollywood film.

Media-shy, Mukesh Ambani nonetheless makes headlines for his ongoing feud with billionaire brother Anil, as well as the 27-story $1 billion home he is building that towers over an old-money neighbourhood in South Mumbai.

But it is his stewardship of Reliance, which is engaged in petrochemicals, refining, oil and gas exploration, and textiles, where Ambani has made his mark, and he is expected to continue looking overseas after raising a warchest by selling $2 billion in company stock.

Despite his public reticence, Ambani clearly thinks big.

In late 2008, he commissioned a new 580,000 barrel per day (bpd) refinery next to Reliance's 660,000 bpd facility in Gujarat, creating the world's single-largest refining complex.

 

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LONDON/DALLAS - There's no sign of chemistry between Reliance Industries and LyondellBasell. The Indian oil and petrochemicals group has already increased its offer for the bankrupt U.S. chemicals group. It could afford to go higher.

Some creditors would be tempted by a $15.5 billion offer. But there's no certainty despite the high price. Reliance, which is known for not over-paying, should take its experiment elsewhere.

 

At the current offer price of $14.5 billion, Reliance -- controlled by Mukesh Ambani -- is already valuing Lyondell at a hefty 10 times 2010 forecast EBITDA. Dow Chemical, one of few reasonable benchmarks, trades on a multiple of just over eight times. Admittedly Lyondell's earnings are at the bottom of the cycle, but a multiple of between 5.5 and six times would be more normal.

 

Lyondell's own adviser, Evercore, has put a $13.5 billion to $15.5 billion enterprise value range on the company. The company's creditors appear to have rejected Reliance's latest offer in favour of seeing through the ongoing Chapter 11 process, which promises to reward them with equity in Lyondell and see its debts cut from $20 billion to just above $5 billion.

 

More of the creditors might go for a Reliance bid at the top of Evercore's range. But much depends on private equity group Apollo, Lyondell's biggest creditor. The investment firm might bite -- but equally it might fancy its chances trying to orchestrate a post-bankruptcy merger of Lyondell with Hexion, the chemicals group it owns. With merger synergies, there might be a case for putting an even higher price tag on Lyondell.

 

Also, some of Lyondell's jewels could be sold when it emerges from bankruptcy. Several parts -- including its licensing and catalyst business or its refining joint ventures in the Middle East -- could command juicier multiples than the group as a whole. That's another possible reason for Lyondell's creditors to hold out for more.

 

Reliance, though, needs to be cautious. Cash isn't a problem -- the company has raised around $2 billion from its own shareholders and has some $7 billion in treasury stock it could use. Reliance can also call on banks for funding. But Ambani, India's richest man, is known for making opportunistic purchases at bargain prices. That chance appears to have passed at Lyondell. He should move on.

 

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MUMBAI - Mukesh Ambani, India's richest man, is faced with a prospect he has only rarely encountered: not getting what he wants.

After months in pursuit of LyondellBasell, Ambani's Reliance Industries appears set to fall short in a takeover bid valuing the petrochemicals group at $14.5 billion. Instead, Luxembourg-based Lyondell is poised to file a reorganisation plan that may lead it out of bankruptcy.

Ambani, whose net worth was estimated at $32 billion by Forbes in November, is likely to treat this as a small setback in his quest to build a presence outside India, where his conglomerate is the biggest listed company and his family stands alongside the Tata clan at the pinnacle of the corporate elite.

Mukesh Ambani, 52, is the eldest son of Reliance's late founder Dhirubhai, a school teacher's son whose rise from Gujarat inspired a Bollywood film.

Media-shy, Mukesh Ambani nonetheless makes headlines for his ongoing feud with billionaire brother Anil, as well as the 27-story $1 billion home he is building that towers over an old-money neighbourhood in South Mumbai.

But it is his stewardship of Reliance, which is engaged in petrochemicals, refining, oil and gas exploration, and textiles, where Ambani has made his mark, and he is expected to continue looking overseas after raising a warchest by selling $2 billion in company stock.

Despite his public reticence, Ambani clearly thinks big.