Reliance Said to Raise Lyondell Bid to $14.5 Billion

Feb. 22 (Bloomberg) -- Reliance Industries Ltd., owner of the world’s largest oil-refining complex, raised its offer for bankrupt LyondellBasell Industries AF to about $14.5 billion, according to two people with knowledge of the offer.

The revised bid allows Lyondell creditors to opt for cash or equity as part of the deal, said the people, who declined to be identified because the talks are private. Reliance, the Mumbai-based refiner and energy explorer controlled by billionaire Mukesh Ambani, offered an undisclosed amount on Nov. 21 to buy a controlling stake in the chemicals and fuels maker.

Buying LyondellBasell would create a company with more than $80 billion in revenue and give Reliance chemical plants and two crude oil refineries in the U.S. and Europe. The chemicals maker rejected a previously revised Reliance bid that valued the company at $13.5 billion, the Wall Street Journal reported Jan. 8.

Reliance had outstanding debt of 700 billion rupees ($15 billion) and cash and cash equivalents of 159.6 billion rupees as of Dec. 31, the company said. Reliance has raised about $2 billion selling shares since September, Chief Financial Officer Alok Agarwal said last month.

David Harpole, a Lyondell spokesman, declined to comment on the revised offer. Manoj Warrier, a spokesman for Reliance, didn’t immediately return a message before regular business hours in India. The Telegraph in India previously reported that Reliance was increasing its offer.

$22 Billion in Debt

Lyondell was formed in a 2007 deal financed with $22 billion in debt in which it was bought by Basell AF, a unit of Len Blavatnik’s Access Industries Holdings LLC. Creditors have said the buyout crippled one of the world’s largest polymers, petrochemicals, and fuel companies, causing it to seek bankruptcy.

Lyondell Chemical Co. filed a plan to reorganize in December while evaluating the offer from Reliance, pitting India’s biggest company against lenders. Lyondell has said it plans to reorganize by repaying its $8 billion bankruptcy loan in full and giving an equity stake in the new company to lenders, including sponsors of a $2.8 billion rights offering.

Access and Apollo Management LP have affiliates that were backers of the company’s rights offering. Ares Corporate Opportunities Fund III was a third sponsor of the rights offering, according to court documents.