Ineos Chemicals in Debt (is IA safe?).

[Trialmaster]

This article appeared in my feed today, which basically says INEOS are in debt to the tune of £10bn. He has already ditched his sponsorship of the NZ Rugby team (All Blacks) and his Americas cup interest. Plus he has cut costs at Manchester United, which I applaud, even though I dislike MUFC. On the Petro-Chemicals he is closing Grangemouth refinery in Scotland (maybe due to the daft UK Green policies).

Have a look at the leftist article from the Guardian.

I try to ignore these articles, but there is some truth in this, if he wants to protect his petro-chemicals industry Ineos Automotive could be up for sale.

I have considered selling my vehicle over the last week, but prices are so low for used vehicles. I would loose £20k in 20 months (bought as an early adopter)?

 

[Tazzieman]

Why would you sell?
Almost all expensive cars lose significant value once they leave the dealer and when a new MY comes to market.
Keep it, use it , like the rest of us early adopters. It will take your mind off the geopolitical disasters unwinding in 2025.

 

[Roach]

Not an owner but following the company/project intently.

I would be concerned, maybe different than @Trialmaster, if Jim cuts Grenadier lose what happens to the owners (parts, dealers, repair, no manual….)

 

[Shopkeep]

Hold Fast. Uncle Jim cutting back on flights of fancy sponsorship agreements is probably a good thing, a very different proposition than selling assets. I never understood the purpose of the All Blacks sponsorship given the limited market it represents and a growing move within New Zealand towards League over Union.
Also not sure who is a potential buyer of Ineos Automotive, given the trade wars about to start no main stream auto maker wants to buy a large French car plant and its associated workforce/liabilities (they will be searching for ways to close or offload their existing surplus capacity).
Finally the Guardian has a long standing anti fossil fuel agenda, not sure I would take their appraisal of the future of Ineos as gospel.

 

[holdmybeer]

My truck is pretty awesome. Sorry about the company.

If IA goes away, there will be a path to service and parts, easy or hard, yet to be seen. Where there’s a will (enthusiastic owners) there’s a way.

I do not want to see IA fail, but I doubt I’d sell my truck over it.

 

[DaveB]

I am not aware of any major company that does not have debts.
They all borrow money to fund projects.
The debt to equity ratio is a better indicator, however all companies are killed by cashflow or inability to refinance.
The 2024 financial report is not out yet for the group, however the 2023 annual report is and also 2024 Quarterly up to Q3 (Calendar)
I can't see any individual figures for Ineos Automotive but Ineos as a whole looks pretty good.
Lyn Calder said that it wasn't set up correctly and she would be doing major/macro restructuring.

 

[TJ D]

I think there are enough units out in the world that even if IA goes away, we'll be ok. Hope so, anyway. Heck of an enthusiastic roster of vendors for a model so new currently. I would think a garage that deals with BMW ought to be able to handle the powertrain ok, anyway. Hoping for the best, but will be sticking with mine for the long haul.

 

[Shopkeep]

The Guardian sure have a hard-on for Jim Ratcliffe, another crack at him here.

 

[grnamin]

I think there are enough units out in the world that even if IA goes away, we'll be ok. Hope so, anyway. Heck of an enthusiastic roster of vendors for a model so new currently. I would think a garage that deals with BMW ought to be able to handle the powertrain ok, anyway. Hoping for the best, but will be sticking with mine for the long haul.

Worst case scenario: I think, just like the old Defender, 3rd parties will step up with a Grenadier/Quartermaster restomod industry.

 

[DaveB]

I think there are enough units out in the world that even if IA goes away, we'll be ok. Hope so, anyway. Heck of an enthusiastic roster of vendors for a model so new currently. I would think a garage that deals with BMW ought to be able to handle the powertrain ok, anyway. Hoping for the best, but will be sticking with mine for the long haul.

We know who all the parts suppliers are so that takes away most of the problems.

 

[AWo]

Sourcing directly from the parts supplier?
Huh, many even have no processes for B2C, than there is are license questions....and have fun, searching all together.

But the positive thing is, most suppliers have a large stock of parts as Ineos did not take as much parts as requested.

AWo

 

[Emil]

I am not aware of any major company that does not have debts.
They all borrow money to fund projects.
The debt to equity ratio is a better indicator, however all companies are killed by cashflow or inability to refinance.
The 2024 financial report is not out yet for the group, however the 2023 annual report is and also 2024 Quarterly up to Q3 (Calendar)
I can't see any individual figures for Ineos Automotive but Ineos as a whole looks pretty good.
Lyn Calder said that it wasn't set up correctly and she would be doing major/macro restructuring.


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Ineos‘ transparency and governance certainly offer room for improvement, and as a customer facing business, IA‘s transparency must improve to limit uncertainty and put a halt to unwarranted speculation and negative word of mouth that result in buyer hesistancy and possibly even fire sales by their most raving early adopter customers. This said, IGH’s strategy appears sound and IGH financially healthy. They must bring down gearing from 6-7 though, ideally to 4-5 by the end of 27, which seems more difficult and might take longer and be more expensive than expected due to market conditions, M&A integration, and high transformation burdens. They are tackeling the issues and sending the right signals, e.g., getting rid of loss makers that have negative outlook and cutting back/restructuring of the sports portfolio. With Ineos’ backing, IA is exceptionally promising, there is no need to abandon it and absent a godfather offer no incentive to sell it along. What is more, even the largest and most successful companies and brands die on average after 70 years and nobody remembers B2B brands anyway - only an emotionally charged B2C product like the Grenadier promises lasting fame far beyond individual lifetimes, a safe path to immortality. In summary, I believe there will never be a time to get a better deal on a Grenadier, and now is the time to buy.

 

[Zimm]

They rode out the seat debacle, so, there weren't planning on tossing in the towel in January. I don't know if their business year ends in January or July. Private companies, especially cult of personality organizations, have a rough time with accurate projections, and when you finally find out it's bad, it's real bad. Right now it's just something to watch, there may have been some unexpected losses.

All news organization have bias. Wise and self aware readers, read multiple sources and check against their own bias's. What really matters is if the organization is bottom up, or top down. If you pay attention to Top down news for any other purpose than to see what morons are brainwashing themselves with, then look in the mirror to find the closest moron. The Guardian has left bias but is most definitely a bottom up news organization. Their data is usually solid, and you can balance it with some WSJ. Murdoch as so far resisted flipping it to the dark side.

 

[Zimm]

, even the largest and most successful companies and brands die on average after 70 years

Anything past 100 years starts to become a statistical outlier. It's why I always chortle when people say they want their government run like a business.

 

[AWo]

Next press release...about F1

10 Milliarden Schulden: Mercedes' F1-Miteigentümer wankt in Wirtschaftskrise

Ineos, einer der Haupteigentümer von Mercedes' Formel-1-Team, krankt: Schulden steigen in astronomische Höhen. Boss Jim Radcliffe beginnt bei Sport-Partnern harte Kürzungen. Erstes Gerichtsverfahren.

www-motorsport--magazin-com.translate.goog

As other press releases already stated that the chemical business heavily sponsored IA, as IA doesn't sell enough units, it is questionable if there are enough fundings left to be trabsferred from Chemicals to Automotive on the long run.

AWo

 

[Baron von Teuchter]

Corporate debt is completely normal. It’s called “leverage” in that world. It makes a load of sense if you can borrow money at 5% to make 15%.

Having subsidiaries that make a loss is also a good thing - the owners write off losses against tax liabilities in other profitable parts of the group.

Most oil/gas/chemical companies are seeing increased costs and therefore reduced profits. Not to mention changing regulatory and taxation issues. If it was Ineos alone I might be slightly concerned but it’s not and I’m not.

 

[Baron von Teuchter]

And, regarding Grangemouth, BP were going to close it decades ago. Ineos bought it on the cheap and extended its life. Now it’s reached (or passed!) its economic lifetime it will be repurposed or decommissioned. It’s lasted way longer than any previous owner planned.

But it closing makes great headlines for both Scottish and UK governments, unions and the media. I do have some sympathy for the workfare but they could have been facing this 20 years ago.

 

[TD5-90]

Having subsidiaries that make a loss is also a good thing - the owners write off losses against tax liabilities in other profitable parts of the group.

Don't agree 100%.
While it's certainly true what you're saying regarding write-off, losses remain losses, and are not profits, which would be better despite being taxed...

 

[mcdoogs]

Corporate debt is completely normal.

Of course. A lot hinges on total amount, interest rate and maturity of the debt though. ~5x debt to ebitda though isn’t great in a high rate environment.

Ineos being a private company though we will never have a full picture of their finances. We can only guess really. Well and pay attention to when analysts issue downgrades https://www.fitchratings.com/resear...look-to-negative-affirms-idr-at-bb-21-01-2025

 

[Baron von Teuchter]

Don't agree 100%.
While it's certainly true what you're saying regarding write-off, losses remain losses, and are not profits, which would be better despite being taxed...

Yeah of course but in his position I’d do exactly the same thing, run some “pet projects” that I was interested in and not worry too much about making losses because they can be offset against income elsewhere.

And let's face it, we all bought expensive vehicles we know will depreciate when the “best” solution might have been to buy an old vehicle that has already lost most of its value. It’s not Al in life to trade off the money we make in investments / savings / appreciating property etc against losing money on things we want (a Grenadier) or want to do (holidays, hobbies etc).