14 December 2010 11:44 [Source: ICIS news]
LONDON (ICIS)--INEOS intends to make a €200m ($267m) voluntary repayment of its senior debt at the end of the year, in addition to a scheduled repayment of €60m, due to strong trading, the global chemicals group said on Tuesday.
The enlarged repayment of €260m was a major contribution towards the group's efforts to repay €500m to banks by the end of 2012 as well as decrease its financial leverage, INEOS added.
"There is a clear commitment by INEOS to de-lever the company," said group communications manager Richard Longden.
INEOS said that the early repayment was now possible as it was now in a position of strong liquidity due to improved trading, the disposal of its fluorochemicals business to Mexichem in March, and the sale of its global films business to Bilcare in August.
“The decision reflects our strong liquidity and improving performance this year,” said John Reece, INEOS Capital's chief financial officer.
INEOS has reported improving results during 2010. The group's third-quarter earnings before interest, tax, depreciation and amortisation (EBITDA) grew 24.9% year on year to €406m, excluding refinery inventory holding losses, thanks to a continuation of improved demand for chemicals.
The EBITDA, which combines replacement cost (RC) EBITDA for refining, and historical cost (HC) EBITDA for chemicals, was €325m in the third quarter of 2009, the company added.
INEOS uses RC/HC EBITDA to measure its compliance with the financial covenants under its senior banking facility. Replacement cost accounting in refining helps iron out losses and gains made against shifting oil prices.
INEOS said its net debt at the end of September 2010 was approximately €7.0bn and net debt leverage 4.3 times. Cash balances at the end of the quarter were €547m.
($1 = €0.75)
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