Ineos set for crunch talks on £6bn debt restructuring

CHEMICALS giant Ineos, which owns the Grangemouth oil refinery, will hold crunch talks with its bankers this week as the UK's largest private company restructures its £6 billion debt.

The group's refinancing plan – which involves a 1bn (890 million) bond issue – has angered a number of its lenders, including ING Investment Management and Harbourmaster Capital Management.

An informal alliance of concerned lenders is understood to have threatened to block the restructuring, which comes less than a year after a previous agreement with the firm's creditors.

A key meeting will be held on Friday.

Like many firms in its sector, Ineos has been hit hard by the recession, with the collapse of the car industry and other big customers affecting demand for plastics, oils and chemicals.

However, Ineos director Tom Crotty yesterday played down reports of anger among the firm's bankers.

He told The Scotsman: "The idea for this refinancing came from the lenders rather than us. The idea that 20-25 per cent are upset just doesn't ring true.

"We need 90 per cent backing from the lenders and so if they don't like it then we'll be back to where we were a month ago."

Crotty said it was necessary to renegotiate last year's refinancing deal in order to allow the company to issue the new bond.

He added: "Our debt price has gone up since the plan was announced last month and so I think there is an appetite in the market for the bond. The ratings agencies have also raised our ratings.

"Business has picked up this year and we are now trading ahead of budget."

Barclays Capital and JP Morgan were appointed as book-runners and joint co-ordinators, while North Sea Partners is acting as financial adviser.

Ineos was founded by chemical engineer turned entrepreneur Jim Ratcliffe in 1998 and has gone on to become the third-largest chemicals group in the world following a long list of acquisitions. Revenues stand at some 31bn.

Ratcliffe is believed to have been courting sovereign wealth funds in the Middle East as part of the latest refinancing plan.

The group now consists of 17 businesses and employs 15,500 staff, with a production network spanning 65 manufacturing sites in 14 countries.

Ineos said it produces more than 30 million tonnes of petrochemicals and 20 million tonnes of fuels each year.

The group's refinery in Grangemouth. Stirlingshire was hit by crippling strikes in 2008 over proposed changes to a company pension plan. The strike was estimated to be the most costly in British history, totalling about 600m.