A week ago, the BBC carried a report that PetroChina had completed "preliminary work" on a possible bid to buy a stake in Ineos' Grangemouth refinery.
The BBC quoted Ineos as confirming it was in talks with "a number of parties" over the future of Grangemouth, whilst cautioning that "the discussions with interested parties are exploratory and it would be premature to speculate on whether any might lead to investment in the site. The Grangemouth petrochemical and refining facility remains a strategic part of the Ineos Group and the company is committed to its long-term development."
The BBC report came after a rare interview in The Times last December with Ineos chairman Jim Ratcliffe, who noted that "Under our agreement with the banks, we need to generate levels of cash which it is difficult to imagine the business doing. At some stage there has to be an asset sale".
This still seems a sensible strategy, even though the blog understands that Ineos doubled EBITDA to €1222m in 2009, versus €594m in 2008, and is currently trading ahead of its business plan. Its liquidity has also improved by c€100m via the Ineos ChlorVinlys divestment, whilst the $350m fluorochemicals sale should complete later this month.
Then 2 days ago, the Sunday Times newspaper reported "that Ineos has recently held exploratory talks with Sabic, and Kuwait's Petrochemical Industries Company." It added that Ineos CEO Tom Crotty had refused to disclose the identity of the potential suitors, but had said "we are in talks with several parties that may lead to us bringing someone in, either as an equity partner in the group or on certain assets".
Yesterday, the Daily Telegraph added that the "proposals discussed with the Middle Eastern players are thought to have included the possibility of the company hiving off its petrochemical commodities business." It quoted an Ineos spokesman as saying that the company had been open about its plans to "further strengthen its balance sheet", although it had "no pressing need to do any deals given our current performance".
Morgan Stanley, the investment bank have reportedly been advising Ineos on Grangemouth since last June, when 'The Scotsman' newspaper suggested that "PetroChina could buy the refinery, while Ineos would retain the polymer and petro-chemical processing plants located on the same site". Perceptively, however, the paper had also quoted PetroChina as saying that "talks can take a really long time".