Reliance Industries Ltd’s (RIL’s) plan to take over the bankrupt petrochemical company LyondellBasell (LB) is
hanging fire with the ailing Dutch firm moving on with its own rescue plan.
While RIL declined comment on the issue, sources close to the company said it is expected to take a call on submitting a final bid for LB by Tuesday.
They said RIL is now concerned about LB’s high debt, with lenders having hiked interest rates to about 12 per cent. LB’s management on Friday proposed a new $2.5-billion rights issue-based rescue plan under which current equity holders could lose their powers.
RIL, which said last month that it had submitted a non-binding preliminary bid said to be between $6 and $10
billion for a controlling interest, recently sent a team of officials to the US to carry out due diligence of LB’s assets.
“Emerging facts about LyondellBasell’s state of debt could be a cause of worry,” said an industry official.
Also, LyondellBasell’s current main stakeholder, Apollo Group, is said to be hostile to Reliance Industries, which could face integration problems.