The business empire of Len Blavatnik, the Russian-born oligarch, was racing against time yesterday to save one of its industrial pillars, LyondellBasell, the chemical company, which is teetering on the edge of bankruptcy with $26 billion (£18 billion) in debts.

One of the world's biggest producers of raw plastics, LyondellBasell must pay $281 million by tomorrow to a group of lenders, including Merrill Lynch, Goldman Sachs, Citigroup, ABN Amro and UBS.

Mr Blavatnik's difficulties come after the troubles of Oleg Deripaska, a fellow-oligarch and partner, whose business empire was rescued in October with a $4.5 billion loan from the Russian Government. Mr Blavatnik is a director and big investor in Rusal, the aluminium giant controlled by Mr Deripaska.

LyondellBasell was created by Mr Blavatnik in a series of daring debt-fuelled acquisitions over three years through Access Industries, his private company. The tycoon, who is a partner in the consortium that owns half of TNK-BP, the Russian affiliate of Britain's biggest oil company, resides in Britain, having purchased a £41 million mansion opposite Kensington Palace.

The sudden collapse in demand for chemicals over the past three months has left the company unable to pay fees and interest totalling $281 million on a bridging loan due on December 19. The lending banks initially agreed to extend the payments until December 29 and, on New Year's Eve, the banks agreed to extend the deadline to January 4.

A LyondellBasell official said last night: “[The talks] are ongoing; we are continuing to work with our bankers.” Asked whether the company was considering bankruptcy, she said: “One of the options is to file for Chapter 11.” The company appears to have been refused a last-minute request for cash from Access Industries, its parent. According to a filing with the US Securities and Exchange Commission, LyondellBasell made a demand for credit on December 30 under a revolving loan facility with an affiliate of Access. The SEC filing states: “Such request has been denied by the lender. We disagree with the basis for this denial.”

The distress at LyondellBasell will be a bitter blow for Mr Blavatnik, 51, who was born and raised in Russia but emigrated to the United States in 1978 and became an American citizen. His rapid ascent to riches came from his investments in Russia. In addition to a stake in TNK-BP, one of Russia's leading oil producers, his assets include a 19 per cent share in Rusal, the aluminium company, and a share in Warner Music Group. Mr Blavatnik is a contributor to charities and his family foundation is sponsoring the Babylon exhibition at the British Museum.

Last year the Russian side of TNK-BP was embroiled in a pitched battle with BP for control of the management of the joint oil venture. One of the demands of the oligarchs' group was for bigger cash dividend payments, prompting speculation that the Russian partners needed cash.

LyondellBasell's troubles follow debt restructuring at Ineos and last week's setback for Dow Chemical, when Kuwaitis cancelled a joint venture to produce chemicals in the Gulf.

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