Ineos Launches €3.58 Billion Loan Refinancing
News agency Reuters UK said lenders were to be consulted late last week, with commitments due October 24, 2020.
The Swiss-headquartered Ba3/BB-rated olefins and polyolefins major, which tends to make bold acquisitions with little cash, last refinanced existing term loans in February, including 2022 and 2024 tranches.
Currently, Ineos’ resources could be strained by the planned takeover of BP’s global petrochemicals business for $5 billion. The recently announced transaction is being billed as the biggest since the beginning of the coronavirus pandemic.
Proceeds from the new term loan, along with €500 million worth of other new senior secured debt and €250 million cash from styrenics subsidiary Styrolution will serve to refinance all of the group’s existing €2.6 billion term loan and a $2.36 billion term loan, reports said.
Under the terms of the BP acquisition, which gives it a position in the polyester and acetyls chain, Ineos has agreed to pay a deposit of $400 million and a further $3.6 billion on completion. The deal is expected to close later this year, without a timetable being announced.
Funds from refinancing will also benefit development of the Forties pipeline. Ineos acquired the pipeline (FPS) that transports oil from the North Sea offshore drilling sites to the British mainland from BP in 2017. With the additional funds, the lifetime of the pipeline will be increased by 20 years, bringing the production of North Sea oil and gas production into 2040 and beyond.
Ineos has also said to be among several other petrochemical producers, including LyondellBasell and Chevron Phillips Chemical, that have made offers to take a stake in Sasol’s glitch-plagued, chemical complex at Lake Charles, Louisiana, USA.