The Belgium-based Ineos group has emerged as the “white knight” to pull PVC market leader European Vinyls Corporation (EVC, B-1160 Brussels; www.evc-int.com) out of its dire financial straits (see Plasteurope.com 23, 2000). EVC has signed a conditional agreement with Ineos Capital Limited calling for Ineos´ participation in an EVC share capital increase. This foresees an Ineos affiliate buying shares worth EUR 75m and thus acquiring a majority stake of 52.7 - 64.7% of the enlarged capital. The remaining 25% will be offered to EVC´s other shareholders.

The deal with Ineos will give Europe´s leading PVC maker a fresh injection of cash, which not only will strengthen its financial position but also could enable it to keep its E-PVC, compounds and rigid films businesses. It had considered selling these to repay debts of EUR 290m. EVC also will be given a “breathing spell” in which it can work on further reducing its cost base and restructuring its operations. Combining the two companies´ purchasing power could also allow EVC to negotiate more favourable raw material contracts, particularly for ethylene, the PVC producer said.

With annual sales of around EUR 3 bn and 6,000 employees at sites in most major countries, Ineos is a petrochemicals spin-off/MBO of Laporte AlphaGary. It bought ICI´s acrylics business in 1999. In another transaction, scheduled to close this quarter, Ineos is already set to become a major shareholder in EVC by indirectly acquiring the stake held by co-founder ICI. The group is to buy Chlor Chemicals (which includes the EVC stake), along with Klea and Crosfield. EVC has postponed an extraordinary shareholders´ meeting planned for 17 January, which was to approve the appointments of new CEO Jacques Hurkmans and CFO Kenneth Tijon. The group said it needed time to prepare a prospectus for the equity increase.