RIL's LyondellBasell bid may be rejected by creditors

Reliance Industries' $14.5 billion bid for LyondellBasell may be rejected by the creditors of the bankrupt Dutch company, a media report said.

"Indian billionaire Mukesh Ambani's $14.5 billion bid for Lyondell, the world's third-largest chemical company, is expected to be rejected by a creditor group led by Apollo," the New York Post said.

Quoting people familiar with the matter, the Post said private-equity firm Apollo Management, founded by billionaire Leon Black, is poised to prevail over RIL in its battle for LyondellBasell.

The move would set the way for Apollo to merge LyondellBasell with its Hexion Specialty Chemicals operation, the paper said. A hearing on a reorganisation plan at the US bankruptcy court in Manhattan that would transfer ownership of the company to the creditors is scheduled for next Monday, the paper said.

Weighed down by massive debts, LyondellBasell's US operations and one of its European holding companies had filed for Chapter 11 bankruptcy protection in 2009.

In November last year, LyondellBasell and Mukesh Ambani- led RIL disclosed a "preliminary non-binding offer" by the Indian firm for taking a majority stake in the chemical major.

Last month, RIL was reported to have sweetened its earlier offer by $1 billion to $14.5 billion. "...but Lyondell creditors still think the bid is too low. And while Ambani still has time to raise his offer," the New York Post said quoting sources. Besides Apollo, Lyondell's group of creditors includes Russian billionaire Leonard Blavatnik.

"Reliance is making a mistake by not offering more," the paper quoted one creditor as saying. Last month, LyondellBasell had said the unsecured creditor and holders of its substantial debt had agreed to support its reorganisation plan aimed at exiting bankruptcy.