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Ineos is considering divesting certain holdings and has engaged in discussions with its lenders regarding the restructuring of a portion of its substantial borrowings, as the chemical conglomerate established by British magnate Sir Jim Ratcliffe contends with an extended period of industry decline.
The firm, based in London, is examining potential divestitures of holdings inside its Inovyn vinyls unit, according to sources close to the situation. These holdings might fetch values in the hundreds of millions of pounds, the sources noted, but warned that discussions were still in early phases.
Ineos has also conversed with financial institutions to restructure debt instruments slated for maturity in the coming year, as per multiple individuals acquainted with the company’s financial standing. Concurrently, investors recently provided an infusion of €200mn in fresh capital to the enterprise, in addition to securing an extra €300mn in funding tied to its stock of goods.
These measures are being taken as Ineos seeks methods to generate liquidity, diminish expenses, and lessen its financial indebtedness, in light of an enduring slump within the chemical industry.
Chemical manufacturers in Europe are contending with a flood of inexpensive goods arriving from China, elevated energy costs, and burdensome regulatory frameworks, compounded by excess production capacity and subdued global demand across the globe.
Ineos accumulated substantial debt as it grew into a leading global chemical enterprise by means of numerous takeovers. The group, a frequent participant in European high-yield bond markets, has seen its financial instruments plummet in value due to broader difficulties in the chemical industry and worries about its indebtedness.
During 2024, Inovyn represented the largest income-generating division within Ineos Quattro, which is one of two parent entities the vast chemical firm utilizes for bond issuance and is under intense scrutiny from high-yield debt investors.
Quattro’s outstanding bonds were trading at face value in September of the previous year but dropped to 65 cents per dollar last month. Their value had rebounded to over 80 cents per dollar by mid-February following a capital infusion and fresh funding revealed in late January.
The proportion of Quattro’s net liabilities relative to its earnings before interest, taxes, depreciation, and amortisation (EBITDA) reached 7.7 at the close of 2025, an increase from 1.9 in 2022. S&P, a credit rating firm, considers any enterprise with a net debt-to-EBITDA ratio exceeding six times to be “substantially indebted.”
This month, Ratcliffe informed the FT that Ineos’s priority was “refinancing its obligations upon maturity” and had “no intention of seeking fresh capital for new ventures,” considering the prevailing circumstances in the chemical sector.
Inovyn manufactures chemicals such as caustic soda and PVC, products extensively employed in the building industry, an area closely tied to broader economic health. European demand for PVC has remained subdued, a region that comprised 70 to 90 percent of Inovyn’s PVC turnover in 2024. Moreover, the enterprise faces substantial vulnerability to electricity costs, which have drastically increased across Europe following Russia’s incursion into Ukraine.
Among its holdings is also its Runcorn plant, responsible for producing the chlorine that cleanses 98 percent of the United Kingdom’s potable water. The inclusion of this operation in the group’s divestment strategy remains uncertain. Inovyn maintains operations throughout Europe, possessing installations in the UK, France, Italy, Germany, Belgium, Spain, Norway, and Sweden.
Inovyn’s adjusted EBITDA experienced a 41 percent decrease in 2024 — the latest year for which data is available — reaching £348mn, compared to revenues of £3.1bn. The previous year, it declared the shutdown of two plants in Germany, attributing this to “exorbitant energy and carbon expenses, combined with insufficient tariff safeguards.”
On Thursday, S&P lowered Quattro’s bond rating further into speculative-grade status, based on projections of reduced earnings in 2025, which would exacerbate its indebtedness. The credit assessor stated that Inovyn’s “energy-consuming” PVC manufacturing activities placed “additional strain” on Quattro’s profitability.
During the previous year, Ineos divested its composite holdings to the American private equity firm, KPS Capital Partners.
Ratcliffe’s shareholding in Ineos has established him as one of Britain’s most affluent persons, and in 2024, he acquired co-ownership of Manchester United. The magnate, a resident of Monaco, issued an apology in February for his assertion that the UK had been “settled by migrants,” an remark that drew censure from UK Prime Minister Sir Keir Starmer.
Ineos refrained from making a statement.