Reliance Negotiates LyondellBasell Acqusition

Mayank Mehta
23 Nov, 2009
New York City

Stocks in Mumbai traded higher after Reliance Industries Ltd inches closer to acquire bankrupt LyondellBasell for at least $10 billion in cash. The debt laden company is operating under bankruptcy. Royal Dutch Shell is likely to take 10% stake in Essar Oil as a part of payment for refinery sale.

[R]6:00 PM Mumbai, 8:30 AM New York – Stocks in Mumbai traded higher after Reliance Industries Ltd inches closer to acquire bankrupt LyondellBasell for at least $10 billion in cash. The debt laden company is operating under bankruptcy. Royal Dutch Shell is likely to take 10% stake in Essar Oil as a part of payment for refinery sale.[/R]

The Sensex index in India increased 158.33 or 0.9% to 17,180.18 and CNX Nifty index rose 51.10 or 1.0% to 5,103.55. Among the Sensex 30 stocks, 20 rose and 10 fell.

On BSE trading, 1,562 stocks advanced, 1,176 declined and 88 were unchanged.

The International Monetary Fund chief Dominique Strauss-Kahn said on Monday that the global economy is in a holding pattern and vulnerable to more upheaval. He said a lasting recovery will depend on policymakers taking the proper steps in the coming months.

Rupee edged higher 16 paisa to 46.45 against one dollar.

Gainers & Losers

Aban Offshore Limited added 0.2% to Rs 1,375.50 after the drilling oil field services provider raised Rs 698 crore by selling 57,00,000 shares to qualified institutions buyers at Rs 1,224.30 each.

Almondz Global Securities Limited climbed 1.7% to Rs 46.05 after one of the promoter group companies hiked its stake in the firm.

Aurobindo Pharma Limited rose 8.5% to Rs 853.00 after the Hyderabad based company inaugurated its formulations manufacturing facility in the city on last Friday.

Axis Bank Limited advanced 0.6% to Rs 998.75 and the bank arranged its larger working capital facility with State Bank of India.

Essar Oil Limited rose 1.5% to Rs 138.85 after the oil explorer said Royal Dutch Shell is in an advanced stage of talks to acquire a 10% stake in the company as part-payment as consideration of the sale of its three refineries in Europe to the Indian company, according to the Economic Times.

Cipla Limited added 2.2% to Rs 315.90 after the pharmaceutical company got U.S. regulatory approval for Lopinavir/Ritonavir tablets.

Hindustan Zinc Limited increased 9.2% to Rs 1,080.70 after a foreign broker rated the stock as 'buy' with a 12-month price estimate of Rs 1,529 a share.

Jindal Drilling Industries Limited fell 2.8% to Rs 560.00.

Lupin Limited fell 0.5% to Rs 1,325.15 after the pharmaceutical company said that Medicis Pharmaceutical Corporation filed a case in a U.S. court against the company alleging patent infringement relating to Solodyn dermatology product, the Business Standard reported on its Web site, citing unnamed official sources.

Pratibha Industries Limited added 3.7% to Rs 272.20 after the Infrastructure development firm has secured a contract from Bangalore Water Supply & Sewerage Board.

Reliance Industries Limited advanced 3.2% to Rs 2,193.10 and the company is negotiating to acquire a controlling stake in LyondellBasell, the world’s third largest petrochemical company for at least $10 billion. The bankrupt chemical maker refiner has operations in Europe and in Houston, Texas generated revenues of $51 billion in 2008 and debt of $23 billion.

The all cash deal between Reliance and LyondellBasell will provide much needed cash to the troubled chemical giant but will also wipe out current shareholders and eliminate most of its debt. Reliance after the acquisition will have a combined revenues of $81 billion.

Reliance Capital Limited increased 1.7% to Rs 880.30 after three foreign insurance companies have approached the company to acquire a stake in its life insurance business before a planned listing, the financial services firm's chief executive said on Monday.

Srei Infrastructure Finance Limited gained 2.8% to Rs 80.25 has sold 57.17% stake to India Power Corp Ltd (IPCL), a consortium promoted by the company and Bhaskar Silicon Pvt Ltd, Andrew Yule.

Techno Electric & Engineering Company Limited rose 2.4% to Rs 171.00 and the company agreed to acquire Simran Wind Project Private Limited. The company is engaged in power generation from wind resources and has generating capacity of 50.45 MW of power in the states of Tamil Nadu and Karnataka.

UltraTech Cement Limited rose 2.9% to Rs 814.60 after the boards of the company and the unlisted Samruddhi Cement approved a merger deal.

United Spirits Limited fell 0.2% to Rs 1,192.70 after the alcohol maker acquired a distillery in south India for 134.2 million rupees ($2.89 million).

Vishal Retail Limited advanced 6.9% to Rs 82.45 after the retailer renegotiated debt restructuring with a consortium of six banks.

Asian Markets Review

Hang Seng index in Hong Kong increased 315.55 or 1.41% to 22,771.39, and CSI 300 index in China higher 34.50 or 0.95% to 3,665.51. ASX 200 index in Australia increased 31.20 or 0.67% to 4,717.00. The FTSE Bursa KL Composite index in Malaysia was lower 3.48 or 0.27% to 1,270.88. The Markets in Japan were closed today.

The Kospi Index in South Korea decreased 1.55 or 0.10% to close at 1,619.05. SET index in Thailand closed lower 4.84 or 0.70% to 690.41. JSE Index in Indonesia decreased 5.95 or 0.24% to 2,481.42. The Sensex index in India increased 158.33 or 0.93% to 17,180.18.