Red flags raised after debts soar at Sir Jim Ratcliffe's chemicals empire

The Guardian

12-02-2025

Sir Jim Ratcliffe faces growing concerns over the financial health of his chemicals empire as its debt pile is forecast to reach almost €12bn (£10bn) this year and his sporting interests including Manchester United and New Zealand rugby hit crisis point.
Two leading credit ratings agencies raised red flags over the Ineos Group weeks before it emerged that the billionaire industrialist would make another 200 redundancies at Manchester United and allegedly cut sponsorship payments to the All Blacks rugby team, blaming 'the deindustrialisation of Europe'.
Fitch Ratings and Moody's, which provide financial health checks for most big companies, said Ratcliffe's chemicals business had racked up debts that were between five to six times larger than the company's annual earnings.
They added that Ineos could take longer than expected to repay those debts in part because of weakness in the European chemical industry after years of rocketing energy costs after Russia's invasion of Ukraine dramatically cut exports of gas to across Europe.
Specifically, Fitch said there was 'uncertainty' over the plan to repay related-party loans of £800m to other parts of the Ineos business empire, meaning the company could remain weighed down by hefty debts until 2027.
The credit agencies have both downgraded their outlooks for the company to 'negative', which could dent its ability to borrow from the leading investment banks at the same terms it was offered in the past.
Ratcliffe's business interests include refining sites across Europe and the US, the Grenadier off-road cars venture and the fashion brand Belstaff.
Many of these companies have seen a sharp decline in fortunes in recent years, which is understood to be piling pressure on the core chemicals business to provide loans in order to keep them afloat.
In November 2023, Petroineos, a joint venture with the Chinese state-owned oil firm CNOOC, announced plans to cease operations at Grangemouth oil refinery by 2025, with more than 3,000 direct and indirect jobs affected.
Ineos's net debt is expected to peak this year at around €11.7bn, according to Fitch, while it carries out work on the €3bn plans to build Europe's biggest petrochemical plant in 30 years in the Port of Antwerp, Belgium.
Moody's described Ratcliffe's chemicals business as 'weakly positioned' and said there were risks that the plans to build the refinery known as Project One could cause the company's costs to rise.
Despite the financial pressure, Ratcliffe has continued to pursue side-projects that include the 2023 deal to take a minority stake in Manchester United, which has made a £300m loss over the past three years.
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He is now facing a legal battle with New Zealand Rugby after he blamed Europe's 'high energy costs and extreme carbon taxes' for his company's alleged failure to make sponsorship payments to the All Blacks team.
The tycoon, who was knighted in 2018 for services to business, has also fallen out with Sir Ben Ainslie after Ratcliffe's Ineos Britannia team parted ways with the four-time Olympic champion for this year's America's Cup. Ainslie has threatened to launch a 'significant' legal fight in response.
A spokesperson for Ineos Group said the rating agencies' downgrades reflect the 'broader economic challenges facing the European manufacturing industry, including sluggish GDP growth and ongoing deindustrialisation pressures'.
'This is a sector-wide trend impacting all chemical companies,' they added.