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INEOS and SINOPEC sign three significant petrochemical deals. The agreements will significantly reshape INEOS’ petrochemicals production and technology in China As announced (today) INEOS and SINOPEC have signed three Joint Venture partnerships in China (press release attached). This is an important step in the growth in INEOS. It creates a powerful partnership which combines the complementary capabilities of INEOS, with its wide technology portfolio, and Sinopec, China’s leading petrochemical company, and it brings to INEOS much greater access to the growing Chinese and Asian markets. To help answer questions, the impact on the IGH and Quattro finance groups is as follows: INEOS Group Holdings The acquisition of the 50% stake in Shanghai SECCO Petrochemical Company Limited is being made by a subsidiary of INEOS Group Holdings SA (together with its subsidiaries, “INEOS Group”). Of the total purchase price of approximately RMB 10.5 billion, the intent is to fund approximately RMB 4 billion from the INEOS Group with the remaining approximately RMB 6.5 billion, financed via a new debt facility, raised in an unrestricted subsidiary, which will have no recourse to the INEOS Group. As of today, INEOS Group has already paid approximately RMB 3.2 billion to Sinopec. The balance will be paid upon completion, towards the end of this year. The establishment of the new 50:50 joint venture to build three new 500ktpa HDPE plants will be achieved via creation of a new jointly owned entity which will initially be focused on building the new plant in Tianjin, expected to be onstream by the end of 2023. This joint venture will be owned by a subsidiary of INEOS Group Holdings SA, and the joint venture will raise a new debt facility to fund most of the construction. INEOS Group will fund its portion of the net investment cost, expected to be approximately RMB 325 million, on completion of the project. Any additional plants may require future investment from INEOS Group. INEOS Quattro To establish the new 50:50 joint venture with SINOPEC to construct 1.2 million tonnes of ABS capacity, SINOPEC will initially purchase 50% of INEOS Styrolution Advanced Materials (Ningbo) Pte Ltd. This is the entity which is constructing the new 600ktpa ABS plant in Ningbo announced by INEOS Styrolution in January 2020. INEOS Styrolution Advanced Materials (Ningbo) Pte Ltd is an unrestricted subsidiary of INEOS Quattro Holdings Limited (together with its subsidiaries, “INEOS Quattro”). On completion of the transaction, INEOS Quattro will receive an initial payment of approximately USD 300 million, with a further amount of approximately USD 130 million due once construction of the first plant is completed. Any additional plants may require future investment from INEOS Quattro. For further information, please contact: INEOS Group Holdings Peter.williams@ineos.com INEOS Quattro: dirk.arhelger@ineos.com
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INEOS and SINOPEC sign three significant petrochemical deals. The agreements will significantly reshape INEOS’ petrochemicals production and technology in China
