INEOS in key meetings with lenders over €7.2bn debt
Ineos is meeting its major lenders in London and New York to discuss revised covenant arrangements on its €7.2bn ($10bn) of senior and high yield debt, the company confirmed on Monday.
The chemicals maker is discussing a revised business plan with representatives of 330 banks and bond holders having already agreed a package of amendments to its financing arrangements with a group of seven lead banks.
It is working towards a 15 July deadline for an agreement to re-set covenants on the debt.
The meetings will be held in London on Monday and New York on Tuesday and followed with one-to-one discussions where necessary.
The agreement with the “sounding group” of lenders includes a reset of the leverage, interest cover and debt service cover covenant levels, with effect from September 2009, revised fees, and an increase in interest margin among other concessions. It was based on a revised five-year business plan prepared with the help of petrochemical industry consultants and financial advisers.
The total cost of the covenants revision is €340m including a maximum “payment in kind” (PIC) arrangement of €160m and fees of €55m. A further €55m in fees would be payable next July.
INEOS is planning for replacement cost earnings before interest, tax, depreciation and amortisation (RCEBITDA) of €1.1bn this year on sales of €15bn. Its EBITDA in 2008 was €1.6bn before inventory holding losses of €845m.
It has €5bn of senior debt and €2bn of high yield debt outstanding on which it has to make a prepayment of €250m within 18 months and €450m within 24 months.