The credit crunch is eating away at the chemical empires built by two secretive tycoons, Jim Ratcliffe, the British owner of Ineos, and Len Blavatnik, the Russian-born entrepreneur who controls Lyondell Basell.

In the debt trading markets, the value of Ineos loans has crumpled to almost half their face value, reflecting investor perception of a heightened default risk. In an attempt to reduce borrowings, it is believed to be trying to sell assets.

Credit concerns are dogging Lyondell Basell after a downgrade by Standard & Poor's, which highlighted its exposure to a petrochemical industry downturn at a time when it is burdened with the cost, including borrowings, of the $21 billion takeover of Lyondell last December.

Mr Blavatnik's holding company, Access Industries, built the chemical group through a series of debt-fuelled takeovers, initially acquiring Basell, a joint venture between Shell and BASF. Last year, at the peak of the chemicals cycle, Basell splashed out on Lyondell, a petrochemical company. Efforts by the group to refinance the acquisition debt this year were unsuccessful.

Reports from Platts, the oil and chemicals pricing service, suggested this month that the credit crunch was affecting trading in propylene and ethylene as concerns about customer solvency spread through the industry.

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