Sources indicate that Reliance Industries (RIL) has updated its non-binding proposal for LyondellBasell (LB). CNBC-TV18 learns that the revised proposal has a significantly higher cash component of USD 5-6 billion from the earlier offer of USD 2 billion. CNBC-TV18's Nayantara Rai reports.
The Apollo Group, which have an exposure as lenders to LB of about USD 10 billion, have submitted a new restructuring plan in which they had said they would be willing to convert USD 18 billion of secured and bridged loans into equity and to an addition to that USD 2.8 billion as cash to backstop LB’s rights offer.
So for RIL to have any chance at all of getting a stake in LB would have to compete with the offer that had been made by Apollo and therefore just have to increase the cash offer.
The previous proposal was about USD 12 billion that included a cash component of about USD 2 billion. Sources say RIL’s updated proposal comprises a cash component of nearly USD 5-6 billion, which will then be significantly higher than what the Apollo Group has also submitted. We also gather that RIL is also simultaneously gaining support from the unsecured lenders.
Remember, LB has struck an agreement with these unsecured lenders. Sources say these unsecured lenders feel that perhaps they could expect a better deal from RIL.
The hearing will be on February 10, so we are going to have to really wait and see, which way the court swings towards because on one side you have RIL and on the other you have the Apollo Group, which are the lenders to LB and the possession of some of their assets, have an exposure of USD 10 billion and are willing to fork out USD 2.8 billion for the company.
The Apollo Group, which have an exposure as lenders to LB of about USD 10 billion, have submitted a new restructuring plan in which they had said they would be willing to convert USD 18 billion of secured and bridged loans into equity and to an addition to that USD 2.8 billion as cash to backstop LB’s rights offer.
So for RIL to have any chance at all of getting a stake in LB would have to compete with the offer that had been made by Apollo and therefore just have to increase the cash offer.
The previous proposal was about USD 12 billion that included a cash component of about USD 2 billion. Sources say RIL’s updated proposal comprises a cash component of nearly USD 5-6 billion, which will then be significantly higher than what the Apollo Group has also submitted. We also gather that RIL is also simultaneously gaining support from the unsecured lenders.
Remember, LB has struck an agreement with these unsecured lenders. Sources say these unsecured lenders feel that perhaps they could expect a better deal from RIL.
The hearing will be on February 10, so we are going to have to really wait and see, which way the court swings towards because on one side you have RIL and on the other you have the Apollo Group, which are the lenders to LB and the possession of some of their assets, have an exposure of USD 10 billion and are willing to fork out USD 2.8 billion for the company.
Source: Money Conrol
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