Zeenews Bureau
Mumbai: Keen to acquire troubled European petrochemical major LyondellBasell, Mukesh Ambani-led Reliance Industries on Monday sold a block of shares – third time in less than four months--worth $786 million to bankroll the purchase.
Reliance Industries’ Petroleum Trust sold – UBS arranged the deal - 330,000 shares for Rs1,050 each.
Following the sale, Reliance share fell by 0.7 percent; however, Sensex continued to play ball with Asian bourses and closed at 17,526.71.
However, UBS has now made it clear that today’s sale will be last of the block trades by the company for a while.
Reliance last week block sold its shares to LIC to raise $577 million after LyondellBasell – which is fighting bankruptcy – raised the value of the deal from $12 billion to $13.5 billion.
To buy the debtor-in-possession corporation for a distress value of 12 billion or less had set the Reliance shares on high as Reliance has $2.4 billion in cash and a liquidity of $8 billion in treasury bonds.
This deal is important for Reliance as LyondellBasell’s American operations – which is up for sale - is the global leader in propylene oxide (used in plastics) and styrene monomer (used in rubber and fibreglass). And, by acquiring Lyondell, Reliance gets to enter and conquer strong markets like America and Europe from a position of strength.
Interestingly, the Rotterdam headquatered LyondellBasell has combined revenue of $50.7 billion while that of Reliance is only $30 billion.
LyondellBasell’s manufacturing operations in US has filed for a bankruptcy under Chapter 11 of US Bankruptcy Code, citing weak sales and low cash in hand and the reorganisation plan had valued the company at $15.5 billion.
A deal between Reliance and Lyondell, the world's third-largest chemicals maker, would create a global energy and chemicals giant, with annual revenues estimated at near 80 billion dollars.
Reliance awaits the outcome of a crucial meeting on Tuesday in the US, where Lyondell's reorganisation proposal will be considered at the United States' Bankruptcy Court.
As per reports Reliance is also keen to look at other overseas acquisitions if the Loyndell deal fails to go through.
First Published: Monday, January 11, 2010, 19:31