2. LyondellBasell Industries (LYB)
LyondellBasell Industries (LYB) was one of the large pre-crisis mega buyouts until it filed for bankruptcy in January 2009, after weak sales and a cash shortfall made the company unable to meet a $280 million interest and debt repayment.
For the chemicals maker, the filing came just over a year after Houston-based Lyondell was sold to Basell of the Netherlands, a subsidiary of conglomerate Access Industries. The merger, based largely on debt financing, pushed the combined company's debt load to roughly $30 billion.
After a 16 months reorganization, LyondellBasell emerged from bankruptcy having reduced its debt load drastically to just over $7 billion from $24 billion when it entered. With minimized debt, the company emerged with an equity value of roughly $10 billion, bolstered by the company's trailing sales of nearly $31 billion at the time.In April 2010, a bankruptcy judge approved its exit, with the consent for a lending arrangement by significant stakeholders Access Industries, Apollo Management and Ares Management. Since an October 2010 IPO, LyondellBasell has surged nearly 50% to $39.28 a share on surging chemicals sales. In 2011, the company earned a record $51 billion in sales as industrial end markets recovered along with the wider economy. Nevertheless, profits in 2011 fell, even after taking into account a one-time $7.4 billion 2010 accounting benefit to the company's bottom line. Dalhman Rose analyst Charles Nievert says that LyondellBasell may be a chemicals industry outperformer for years to come. "While we expect commodity chemical shares to take a breather after having outperformed the broader indices since the beginning of the year, we believe LyondellBasell will continue to take advantage of lower US ethane over the coming year despite its European headwinds," wrote Nievert in a Mar. 2 note. He rates the company's shares a "buy," with a price target of $53 a share. LyondellBasell is expected see its profitability increase by roughly 25% in 2012 to $2.7 billionon $50.4 billion in sales, according to consensus analyst estimates compiled by Bloomberg, which give the company a price target of $52.31. In 2013, those analysts espect the company to see profits improve to $3.2 billion on growing sales of nearly $52 billion. Overall, 16 analysts rate LyondellBasell shares a "buy," while only 1 analysts rates shares a "hold." TheStreet Ratings rates LyondellBasell Industries as a "hold." You can view the full Ratings Report Ratings Report for LyondellBasell for more on the company's financial performance.
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