INEOS postpones plans for IPO

The Financial Times reports today that Ineos has postponed plans for an initial public offering. It says this “was one of a range of options that had been considered by the company to strengthen its balance sheet, which was burdened with more than €7bn ($10bn) of debt“. It adds that Ineos is still looking at “full or partial sales of operating businesses to help reduce its debt“, as noted last month by the blog.

The FT says that the possible IPO was discussed with Barclays Capital, one of Ineos’ main lenders. But it notes that in today’s investment climate, “highly leveraged companies such as Ineos may find it difficult to float“. It says Ineos’ net debt “was €7.49bn at the end of 2008, roughly seven times last year’s expected EBITDA” and compares this with “a survey of investors by RBS Hoare Govett in the summer (which) revealed investors’ reluctance to support IPOs for companies whose net debt after flotation would be more than three times their EBITDA“.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. He also serves as a Global Expert for the World Economic Forum. The aim of this blog is to share ideas about the influences that may shape the chemical industry and the global economy over the next 12 – 18 months. It looks behind today’s headlines, to understand what may happen next in critical areas such as oil prices, China and Emerging Markets, currencies, autos, housing, economic growth and the environment. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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