Lyondell Chemical, the bust US business of Dutch chemicals company LyondellBasell, won approval last night for a $2.1 billion loan to keep its operations running.

The funding was approved at a Manhattan bankruptcy court a day after nearly 80 companies associated with LyondellBasell filed for Chapter 11 bankruptcy protection in the US.

The company, which had been hit by heavy debts and a global fall in demand for petrochemical products, needs the cash to pay down more than a $1 billion of debt which will be due in the next few weeks and also to run is operations.

The loan is called debtor-in-possession (DIP) financing and will be made by a group of mostly pre-existing lenders to the company. The court also approved a $100 million emergency loan from Citigroup to tide the company over until the other cash comes through.

Lyondell has asked the court to approve $8 billion in DIP financing in total that, if approved, would be one of the largest of its type ever put together by a bust company.

The DIP financiers include Citigroup, Merrill Lynch, Goldman Sachs, UBS, ABN Amro and private equity firms Apollo Management, Cerberus Capital Management, Appaloosa and Silver Point.

Apollo is one of the biggest of Lyondell's debtors with a $2 billion pre-existing loan to the company.

Access Industries, the investment vehicle of Len Blavatnik, the part-owner of Lyondell, agreed to pull out of the DIP financing, to which it had earlier agreed to contribute $750 million, at the last minute after other lenders became worried that it would receive better terms on its loan.

Mr Blavatnik, a Russian billionaire, led a consortium that bought LyondellBasell in a $12.7 billion leveraged buyout last year.

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