Can the Middle East crisis save Jim Ratcliffe’s Ineos empire?
Some bond investors believe the group’s debt is unsustainable, but others think its scale and edge will see it through
Sir Jim Ratcliffe has spent decades turning unloved industrial assets into a sprawling chemicals empire that is one of Europe’s biggest issuers of junk-rated debt.
Now bond investors are weighing whether the outspoken billionaire has finally met a problem he cannot refinance — or if he will be saved by geopolitical events.
For much of the past year hedge funds piled up bets against Ratcliffe’s Ineos, as a downturn in the chemicals sector raised doubts over the sustainability of its $19bn debt pile.
But in recent months they have been forced to unwind those positions, people familiar with the matter say, as the Middle East crisis disrupted chemicals supply chains and pushed prices sharply higher, prompting a sudden improvement in the group’s prospects.
“At the end of last year just about every restructuring adviser in Europe would have been sharpening their pencils,” said Simon Matthews, senior portfolio manager at Neuberger Berman, adding that while “disruption in the Middle East has been a very robust shot in the arm, the question is how long the benefit will last”.
Investors remain sharply divided. Some are convinced the company cannot last. Others are confident its scale and competitive advantages will keep it afloat.
Ratcliffe has built Ineos into a business spanning 27 countries, becoming one of Britain’s richest people in the process while also making billionaires of his longstanding lieutenants Andy Currie and John Reece, who each hold a 20 per cent stake in the group.
That wealth has allowed Ratcliffe to pursue side projects that have raised his public profile, from his part-ownership of Manchester United football club and sports sponsorship deals to building a spiritual successor to the classic Land Rover Defender.
But in recent years his empire has come under strain as higher interest rates put pressure on a debt pile built up during a period of historic lows, and as Europe’s chemicals sector has been buffeted by weak demand, overcapacity, high energy costs and cheap Chinese imports.
Those pressures have come alongside heightened scrutiny of Ratcliffe himself over his role in Manchester United’s bumpy ride and controversial comments in which he said Britain had been “colonised” by immigrants.
For credit investors, Ineos is in effect two main companies, whose billions in publicly traded bonds make up the vast majority of its debt pile.
Ineos Group Holdings focuses mostly on commodity chemicals such as ethylene, polypropylene and acetone, and is regarded by credit investors as the conglomerate’s “crown jewel”. The riskier Ineos Quattro focuses on more specialised products ranging from nitriles used for carbon fibre to vinyls that go into high-performance coatings.
Both divisions are lossmaking, while leverage has grown rapidly in recent years as borrowing rose to fund Group Holdings’ new flagship facility and earnings fell to record lows.
Group Holdings carries more than $12bn of debt and Quattro roughly $5bn, and investors have increasingly questioned whether either business would be able to refinance looming maturities.
Group Holdings, whose interest payments amounted to €780mn last year, had €1bn of debt coming due for repayment in 2027. Quattro paid €550mn in interest last year and has about €350mn of debt due to be repaid in 2027.
However, taking advantage of the reprieve provided by the war on Iran, Group Holdings last month borrowed another €700mn in an oversubscribed refinancing to pay down some of its debt.
The larger of the two divisions, Group Holdings’ main business is converting cheap ethane from US shale gas into commodity chemicals that it sells to other groups or uses in its own manufacturing. It also produces speciality substances used in consumer and industrial manufacturing.
Prices for many Ineos products fell during the downturn amid an uptick in supply from the Middle East and Asia. Ratcliffe has filed more than 30 anti-dumping cases against imports of cheap chemicals. However, the price of feedstock has also remained low.
Weaker margins and spending on the new “Project One” facility in Antwerp helped push Group Holdings to a €650mn loss in 2025, down from a profit of more than €2bn in 2022.
The €4.8bn plant is due to be completed by the end of the year and will be Europe’s first new facility of its kind in more than two decades.
Project One is designed to exploit the price gulf between cheap US gas and high European chemicals prices — a spread further widened by disruption in the Middle East. Industry insiders say its efficiency could render older European cracker facilities uneconomic.
The project has helped drive an almost doubling of Group Holdings’ debt since 2021, but investors are betting it will eventually repair the balance sheet.
The company expects it to contribute an extra €700mn in annual earnings before interest, tax, depreciation and amortisation from 2027, and to improve margins for the group as a whole.
Like Group Holdings, Quattro is free cash flow negative — but in its case this is not down to a project that has required huge initial outlays but will eventually pay for itself.
Formed from assets bought from BP in 2020, the division has a much larger exposure to lower-margin Asian markets and reported a loss of more than €800mn in 2025, compared with a profit of more than €2bn in 2022.
Its debt pile has stayed relatively steady since 2020 but a sharp drop in earnings has increased leverage. With upcoming maturities, several credit investors told the FT that Quattro was unlikely to be able to access the primary bond market to raise new debt.
The division has sold assets and closed plants in Italy and Germany as pressure on the business has intensified.
However, it does have about €2bn of available cash, helped by €200mn of new equity injected by shareholders as well as another €300mn of financing linked to its inventory at the end of last year.
Debt prices across both divisions have risen sharply as the Middle East crisis tightened global chemicals markets and improved sentiment towards the sector.
Group Holdings’ Olefins & Polymers business is likely to benefit most from the conflict because the disruption to global olefins supply is “effectively reversing the capacity overhang that has pressured profitability in recent years”, said CreditSights head of European chemicals, Tom Weaver.
“Low-cost production from the Middle East and Asia has been removed from the market by a combination of feedstock and energy shortages, and damage from military strikes,” he added.
Prices of olefins and polymers in North America, where Ineos Group generated most of its ebitda in 2025, have shot up while the price of feedstock inputs has remained low.
For the first quarter of 2026, Group Holdings reported €421mn in ebitda — it expected another €400mn of ebitda in April, after the conflict had started.
Executives say the longer-term impact of the conflict remains uncertain.
Ineos also has its own issues related to the crisis, including a potential delay to Project One because two components are stranded in the Gulf.
Other lossmaking Ineos businesses including its oil and gas assets, sports and automotive divisions and the UK’s last ethylene plant at Grangemouth have also stretched the group’s finances, with cash funnelled from other parts of the empire to fund their operations.
However, many investors are still keeping the faith.
“I don’t own Ineos’s bonds,” said the chief investment officer of one distressed credit hedge fund. “But I’d never bet against Jim Ratcliffe.”