The US operations of LyondellBasell, the world’s third-largest petrochemical company, filed for bankruptcy protection under the weight of a massive debt load and slumping demand for its products.
The company had taken on billions of dollars in debt obligations a year ago, when billionaire Len Blavatnik led a $12.7 billion leveraged buyout of US firm Lyondell by Basell of the Netherlands.
The New York bankruptcy filing on Tuesday included almost 80 units of the company and encompassed its US operations and a European financing arm. The company’s non-US operations are not included in the Chapter 11 bankruptcy and are continuing to operate as usual.
LyondellBasell Industries, whose products range from fuels to chemicals and plastics, is owned by the Russian- born Blavatnik through New York-based Access Industries and is based in the Netherlands.
The US operations have obtained $8 billion in debtor-in-possession financing to help fund operations, including $750 million from Access Industries.
The privately held company, which operates a massive refining and processing plant in Houston, has suffered from plunging demand for chemicals as industries such as autos, housing and electronics weakened. Tight credit markets have made renegotiating debt difficult.
The company is not alone in its struggles.
“We’re getting back to the kind of scenario that played out earlier this decade when we had five or six defaults per year,” said Kyle Loughlin, analyst with Standard & Poor’s.
Among LyondellBasell’s largest creditors were Venezuelan oil company Petroleos de Venezuela (PDVSA), Algerian energy group Sonatrach, Exxon Mobil Corp and Dow Chemical Co.
LyondellBasell’s lenders include Merrill Lynch, Goldman Sachs Group Inc, Citigroup Inc, ABN AMRO and UBS Securities LLC, according to filings.
LyondellBasell, which employs 17,000 workers and had revenue of $44.7 billion in 2007, has seen its liquidity drop to $639 million currently from $1.67 billion at the end of the third quarter, falling short of its quarterly interest and maintenance costs.
Its products are used in numerous products including fuels, rigid and flexible packaging, plastic pipe, detergents, cosmetics, electronics and appliances.
The bankruptcy filing was made in the US Bankruptcy Court for the Southern District of New York.
Showing posts with label bankruptcy. Show all posts
Showing posts with label bankruptcy. Show all posts
Wednesday, January 7, 2009
Tuesday, December 9, 2008
US media giant Tribune files for bankruptcy
The Tribune Co., owner of the Los Angeles Times, The Chicago Tribune and other dailies, filed for bankruptcy on Monday, in the latest blow to a newspaper industry reeling from a drop in advertising and the rise of online media.
The Chicago-based company said it was forced to seek bankruptcy protection because of a sharp drop in revenue and a $13 billion debt load but has enough cash to sustain operations while it restructures.
It said the Chicago Cubs baseball franchise and its iconic stadium, Wrigley Field, were not included in the Chapter 11 bankruptcy filing, which protects the company from its creditors while it restructures, and the Tribune would continue to try to find a buyer for the team.
The Tribune’s eight newspapers, 23 television stations and interactive properties will continue to operate during the reorganization, the company stressed, adding that it “has sufficient cash to do so.”
“This restructuring focuses on our debt, not on our operations,” said Tribune chairman and chief executive Sam Zell, the Chicago real-estate titan who led the 2007 private equity buyout of the Tribune Co.
Tribune is the second-largest US newspaper publisher in terms of revenue and the third in terms of circulation.
Besides the Los Angeles Times, which has slashed its editorial staff from 1,200 in 2001 to 660 today, it owns the Chicago Tribune, Baltimore Sun, Orlando Sentinel, Hartford Courant and several other papers.
According to US media reports, its cash flow is not enough to cover one billion dollars in interest payments due this year and a $512 million debt payment due in June.
The Tribune said that in the year since it went private it has repaid approximately $1 billion of its senior credit facility and has been “rewriting the business model for its media assets.”
Like many US newspapers, the Tribune has been grappling with declining circulation, a loss of readership to online media, and a steep drop in print advertising revenue.
Many advertisers have been shifting their dollars to the Web but gains in online advertising revenue have failed to keep pace with losses on the print side.
According to the Audit Bureau of Circulations, circulation for 507 daily US newspapers fell 4.64% in the six months to September.
US media company EW Scripps Co., which owns newspapers in 15 US markets and 10 television stations, announced 400 job cuts last month and has put one of its flagship papers, the Rocky Mountain News, up for sale.
Another debt-ridden major newspaper chain, McClatchy Co., has carried out a series of layoffs this year and, according to the New York Times, is seeking to sell one of its flagship newspapers, The Miami Herald.
Gannett Co., the largest US newspaper chain, publishing USA Today and 84 other newspapers, announced 1,000 job cuts in August and is currently laying off another 10% of its workforce.
The prestigious New York Times itself has not been immune to the crisis gripping the newspaper industry.
The paper reported Monday that the New York Times Co. plans to borrow up to $225 million against its mid-Manhattan headquarters building to ease a potential cash flow squeeze.
Tribune Co. reported a loss of $124 million in the third quarter, compared with a net profit of 84 million dollars a year earlier.
The company has undertaken a series of moves in a bid to ease its debt burden in addition to seeking a buyer for the Chicago Cubs.
In May, it sold its stake in the New York newspaper Newsday for $650 million and in October it said it had informed the Associated Press it plans to terminate its contract with the US news agency in two years.
The Chicago firm traces its history to 1847 with the birth of the Chicago Tribune. It became a publicly traded company only in 1983.
In 2000, the Tribune bought the Times-Mirror group, including the flagship Los Angeles Times, for $8.3 billion in what was then the largest acquisition ever in the US newspaper industry.
The Chicago-based company said it was forced to seek bankruptcy protection because of a sharp drop in revenue and a $13 billion debt load but has enough cash to sustain operations while it restructures.
It said the Chicago Cubs baseball franchise and its iconic stadium, Wrigley Field, were not included in the Chapter 11 bankruptcy filing, which protects the company from its creditors while it restructures, and the Tribune would continue to try to find a buyer for the team.
The Tribune’s eight newspapers, 23 television stations and interactive properties will continue to operate during the reorganization, the company stressed, adding that it “has sufficient cash to do so.”
“This restructuring focuses on our debt, not on our operations,” said Tribune chairman and chief executive Sam Zell, the Chicago real-estate titan who led the 2007 private equity buyout of the Tribune Co.
Tribune is the second-largest US newspaper publisher in terms of revenue and the third in terms of circulation.
Besides the Los Angeles Times, which has slashed its editorial staff from 1,200 in 2001 to 660 today, it owns the Chicago Tribune, Baltimore Sun, Orlando Sentinel, Hartford Courant and several other papers.
According to US media reports, its cash flow is not enough to cover one billion dollars in interest payments due this year and a $512 million debt payment due in June.
The Tribune said that in the year since it went private it has repaid approximately $1 billion of its senior credit facility and has been “rewriting the business model for its media assets.”
Like many US newspapers, the Tribune has been grappling with declining circulation, a loss of readership to online media, and a steep drop in print advertising revenue.
Many advertisers have been shifting their dollars to the Web but gains in online advertising revenue have failed to keep pace with losses on the print side.
According to the Audit Bureau of Circulations, circulation for 507 daily US newspapers fell 4.64% in the six months to September.
US media company EW Scripps Co., which owns newspapers in 15 US markets and 10 television stations, announced 400 job cuts last month and has put one of its flagship papers, the Rocky Mountain News, up for sale.
Another debt-ridden major newspaper chain, McClatchy Co., has carried out a series of layoffs this year and, according to the New York Times, is seeking to sell one of its flagship newspapers, The Miami Herald.
Gannett Co., the largest US newspaper chain, publishing USA Today and 84 other newspapers, announced 1,000 job cuts in August and is currently laying off another 10% of its workforce.
The prestigious New York Times itself has not been immune to the crisis gripping the newspaper industry.
The paper reported Monday that the New York Times Co. plans to borrow up to $225 million against its mid-Manhattan headquarters building to ease a potential cash flow squeeze.
Tribune Co. reported a loss of $124 million in the third quarter, compared with a net profit of 84 million dollars a year earlier.
The company has undertaken a series of moves in a bid to ease its debt burden in addition to seeking a buyer for the Chicago Cubs.
In May, it sold its stake in the New York newspaper Newsday for $650 million and in October it said it had informed the Associated Press it plans to terminate its contract with the US news agency in two years.
The Chicago firm traces its history to 1847 with the birth of the Chicago Tribune. It became a publicly traded company only in 1983.
In 2000, the Tribune bought the Times-Mirror group, including the flagship Los Angeles Times, for $8.3 billion in what was then the largest acquisition ever in the US newspaper industry.
Sunday, November 9, 2008
19 American banks go bust in ’08
Ravaged by the financial turmoil, the world’s largest economy, the US,
has this year seen the failure of as many as 19 banks - exactly half
the number of all publicly-listed banks in India.
According to the Federal Deposit Insurance Corporation, the US
regulatory body, which is often appointed as the receiver for failed
banks, the number of bank-failures in the past eight years has grown
to 46 - which is more than the total of 38 banks listed on the Indian
bourses.
Nearly half of the failures has been during the ongoing turmoil in the
US financial market, with a total of 21 banks having failed since
September last year and 19 since January this year, the FDIC data
shows.
The current year has already seen the highest number of bank failures
in the midst of the United States grappling with one of the worst
economic crisis since the Great Depression of 1930s.
Prior to 2008, the highest number of bank collapses was recorded in
2002, when 11 such entities failed.
In India, there are a total of 38 banks listed on the stock exchange,
which include 18 from the private sector and 20 from the public
sector.
On Friday, Houston-based Franklin Bank SSB and Security Pacific Bank
in Los Angeles became the latest bank failures in the US, forcing
state authorities to take them under their control.
Since August 2008 as many as 12 banks have gone bust - a period when
the current financial turbulence began to squeeze the economy.
They include Freedom Bank, Alpha Bank & Trust, Meridian Bank, Main
Street Bank, Washington Mutual Bank, Ameribank, Silver State Bank,
Integrity Bank, The Columbian Bank and Trust and First Priority Bank.
Before August this year, seven banks - First Heritage Bank, First
National Bank of Nevada, IndyMac Bank, First Integrity Bank, ANB
Financial, Hume Bank and Douglass National Bank - had collapsed.
Going by the FDIC data, there were no bank failures in 2005 and 2006.
On the other hand, only two banks had failed in 2000, the lowest
number in last eight years.
In 2007, just three banks failed in the country - Miami Valley Bank,
NetBank and Metropolitan Savings Bank.
The fall of Washington Mutual, the country’s largest savings and loan
entity, is one of the biggest bank failures this year. Better known as
WaMu, its larger rival JPMorgan Chase agreed to acquire the entity in
September.
JPMorgan bought deposits and branches of WaMu for about $1.9 billion,
in a deal brokered by the Federal administration.
Going by the available data, Bank of Honolulu and National State Bank
of Metropolis went bust in 2001.
Then next year, four banks collapsed - First Alliance Bank & Trust
Company, The Malta National Bank, Superior Bank and Sinclair National
Bank.
In 2003 and 2004, the number of banks which failed stood at seven.
They are Southern Pacific Bank, The First National Bank of
Blanchardville, Pulaski Savings Bank, Dollar Savings Bank, Guaranty
National Bank of Tallahassee, Reliance Bank and Bank of Ephraim.
has this year seen the failure of as many as 19 banks - exactly half
the number of all publicly-listed banks in India.
According to the Federal Deposit Insurance Corporation, the US
regulatory body, which is often appointed as the receiver for failed
banks, the number of bank-failures in the past eight years has grown
to 46 - which is more than the total of 38 banks listed on the Indian
bourses.
Nearly half of the failures has been during the ongoing turmoil in the
US financial market, with a total of 21 banks having failed since
September last year and 19 since January this year, the FDIC data
shows.
The current year has already seen the highest number of bank failures
in the midst of the United States grappling with one of the worst
economic crisis since the Great Depression of 1930s.
Prior to 2008, the highest number of bank collapses was recorded in
2002, when 11 such entities failed.
In India, there are a total of 38 banks listed on the stock exchange,
which include 18 from the private sector and 20 from the public
sector.
On Friday, Houston-based Franklin Bank SSB and Security Pacific Bank
in Los Angeles became the latest bank failures in the US, forcing
state authorities to take them under their control.
Since August 2008 as many as 12 banks have gone bust - a period when
the current financial turbulence began to squeeze the economy.
They include Freedom Bank, Alpha Bank & Trust, Meridian Bank, Main
Street Bank, Washington Mutual Bank, Ameribank, Silver State Bank,
Integrity Bank, The Columbian Bank and Trust and First Priority Bank.
Before August this year, seven banks - First Heritage Bank, First
National Bank of Nevada, IndyMac Bank, First Integrity Bank, ANB
Financial, Hume Bank and Douglass National Bank - had collapsed.
Going by the FDIC data, there were no bank failures in 2005 and 2006.
On the other hand, only two banks had failed in 2000, the lowest
number in last eight years.
In 2007, just three banks failed in the country - Miami Valley Bank,
NetBank and Metropolitan Savings Bank.
The fall of Washington Mutual, the country’s largest savings and loan
entity, is one of the biggest bank failures this year. Better known as
WaMu, its larger rival JPMorgan Chase agreed to acquire the entity in
September.
JPMorgan bought deposits and branches of WaMu for about $1.9 billion,
in a deal brokered by the Federal administration.
Going by the available data, Bank of Honolulu and National State Bank
of Metropolis went bust in 2001.
Then next year, four banks collapsed - First Alliance Bank & Trust
Company, The Malta National Bank, Superior Bank and Sinclair National
Bank.
In 2003 and 2004, the number of banks which failed stood at seven.
They are Southern Pacific Bank, The First National Bank of
Blanchardville, Pulaski Savings Bank, Dollar Savings Bank, Guaranty
National Bank of Tallahassee, Reliance Bank and Bank of Ephraim.
Sunday, October 19, 2008
WorldSpace files for bankruptcy in US
Chennai, Oct. 18 Digital satellite radio broadcasting company, WorldSpace Inc, has filed for bankruptcy protection in a US court after failing to obtain new financing.
According to reports, the Maryland-based company has listed a debt of $2.1 billion and assets of $307.4 million as of June 30, 2008. WorldSpace has sought bankruptcy protection so as to be able to raise fresh funds to repay its debts.
WorldSpace is present in over 130 countries worldwide. It launched its India services in 2000 with over 35 free-to-air channels. In 2002, it converted a few of its channels to pay and went completely pay in 2004.
As at the end 2007, it had a customer base of over 1.6 lakh in India — over 93 per cent of its world-wide subscriber base.
It beams over 45 channels in India, most of which are branded ‘WorldSpace’ though a few are owned and operated by other players such as BBC, CNN, AIR and KL Radio.
The company stopped all promotional and marketing activities in India by mid-2007. It has also applied for licence to have terrestrial repeaters for better decoding of satellite signals and to develop mobile receivers to be used in automobiles.
From Day One, WorldSpace has been subsidising all its receivers in the Indian market. Initially, it sold receivers made in Japan (National, JVC and Hitachi) and later added a few brands from Korea and BPL in India before finally sourcing all the receivers from BPL. These receivers are retailed in India at prices between Rs 2,500 and Rs 3,500.
The current subscription rate is Rs 1,800 a year. WorldSpace has also been trying to rope in a local partner for a strategic alliance. Besides, licence permitting, it intends to introduce ‘mobile’ receivers — such as those that could be carried in cars. WorldSpace has been in talks with a few car makers for this.
The head of India operations could not be contacted. However, other sources, when asked about the fate of the 1.64 lakh Indian subscribers, said that it would take “a few more days for us to get some clarity about India operations”.
According to reports, the Maryland-based company has listed a debt of $2.1 billion and assets of $307.4 million as of June 30, 2008. WorldSpace has sought bankruptcy protection so as to be able to raise fresh funds to repay its debts.
WorldSpace is present in over 130 countries worldwide. It launched its India services in 2000 with over 35 free-to-air channels. In 2002, it converted a few of its channels to pay and went completely pay in 2004.
As at the end 2007, it had a customer base of over 1.6 lakh in India — over 93 per cent of its world-wide subscriber base.
It beams over 45 channels in India, most of which are branded ‘WorldSpace’ though a few are owned and operated by other players such as BBC, CNN, AIR and KL Radio.
The company stopped all promotional and marketing activities in India by mid-2007. It has also applied for licence to have terrestrial repeaters for better decoding of satellite signals and to develop mobile receivers to be used in automobiles.
From Day One, WorldSpace has been subsidising all its receivers in the Indian market. Initially, it sold receivers made in Japan (National, JVC and Hitachi) and later added a few brands from Korea and BPL in India before finally sourcing all the receivers from BPL. These receivers are retailed in India at prices between Rs 2,500 and Rs 3,500.
The current subscription rate is Rs 1,800 a year. WorldSpace has also been trying to rope in a local partner for a strategic alliance. Besides, licence permitting, it intends to introduce ‘mobile’ receivers — such as those that could be carried in cars. WorldSpace has been in talks with a few car makers for this.
The head of India operations could not be contacted. However, other sources, when asked about the fate of the 1.64 lakh Indian subscribers, said that it would take “a few more days for us to get some clarity about India operations”.
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