The chemicals empire owned by the billionaire Jim Ratcliffe is in talks to sell parts of the business in the hope of raising hundreds of millions of pounds to tackle its rising debts, according to a report.
The talks are at an early stage but have focused on selling assets from Ratcliffe’s vinyls business, Ineos Inovyn, the Financial Times said, citing people familiar with the matter.
Ineos group is scrambling to cut costs and reduce its debts amid a prolonged downturn in the global chemicals industry. Ratcliffe, who is the UK’s seventh richest person, has described this as “unsurvivable” for chemical plants in Europe owing to “rising carbon costs and weak trade defence”.
The two largest companies in his empire, Ineos Group Holdings and Ineos Quattro Holdings, together had more than £18bn of borrowings at the end of last year, an increase of almost £3bn on the year before.
The conglomerate is in talks with credit firms to refinance bonds that are due to mature next year, according to the report. It added that shareholders had injected €200m (£175m) of new equity into the business in recent weeks alongside raising another €300m of financing.
Ratcliffe, who has described carbon taxes as “the most idiotic tax in the world”, has blamed Europe’s climate agenda and trade policies for many of the struggles faced by his business. He shifted his tax residency to Monaco in 2020 and this month he was forced to apologise for accusing immigrants of “colonising” Britain and implying that people on benefits were an unaffordable drain on public funds.
Ineos faces looming deadlines for debt repayments and pressure from credit ratings agencies that have sounded the alarm over the outlook for the business, which could make it more difficult and costly for it to borrow from big lenders.
S&P Global said this month it had downgraded its credit rating for two Ineos companies and given the business a negative outlook owing to fears that its earnings could fall further.
The rating agency warned of further downgrades if Ineos group was unable to reduce its £18bn debt pile to below six and a half times the level of its underlying profits.
Europe’s rise in energy costs after Russia’s full-scale invasion of Ukraine in 2022 has been compounded by steep competition from chemicals makers in the Middle East and Asia, which face fewer green costs and taxes. The difficult economic environment has contributed to many companies within the Ineos group plunging to a loss.
A spokesperson for Ineos said the company “continually reviews its portfolio and capital structure” to ensure the business “remains strong, resilient and well-positioned for the long term. In challenging market conditions for the global chemicals industry, it is prudent management to explore refinancing options.
“Our focus remains on disciplined cost control, maintaining liquidity, and refinancing debt as it falls due, not raising new funding for expansion.”
