Ineos Group, the chemical company owned by British businessman Jim Ratcliffe, has assured creditors that it will not tap into its chemical empire in order to finance an offer for a share in Manchester United.
Ineos Quattro executives, a petrochemical division of Ratcliffe’s group, informed creditors on Monday that the funding for the football club would not come from the company. People with knowledge of the situation said that he plans to use his own wealth for any deals.
People said that the discussions took place during a conference call held this week to update investors on Ineos Quattro’s strategy and outlook in the chemical industry.
Jayanth Kandalam was present at the conference call and said that the management categorically stated Quattro’s liquidity would not allow Ineos Limited to fund their private projects.
Ratcliffe’s estimated net worth is $16,8 billion according to Billionaires Index. Andy Currie, John Reece and other Ineos shareholders are expected to join him in the Manchester United deal, according to one source.
Two Ineos Quattro creditors, who requested anonymity to discuss sensitive information, expressed concern that a Manchester United investment would require additional cash to fund. This is a concern, especially as the chemical industry struggles with rising production costs and a weaker demand.
Ineos’ representative said that the group was in an “extremely solid position” despite the downturn on the market and can take a long term view of its business.
The spokesperson stated that “it was very clear during the call that there will be no dividend payments for the purchase by Manchester United which has nothing whatsoever to do with Ineos Quattro.” Any Manchester United transactions would be from the owners.
Ratcliffe is the chairman of Ineos and is currently negotiating to purchase a 25% stake in Manchester United. This deal could be worth more than £5billion ($6.1billion). Ratcliffe would then have to invest additional funds in the redevelopment and training of Manchester United’s Old Trafford Stadium.
The Premier League is notorious for draining cash from football teams. Billionaires and state-backed entities such as Saudi Arabia’s Newcastle United FC compete to win trophies, sign players and qualify for the lucrative European Champions League.