JIM RATCLIFFE, the chemicals tycoon who runs Ineos, Britain’s biggest private company, has revealed the cost of refinancing its £6.4 billion debt and the dramatic steps taken to cut costs to ensure its survival.

Ineos, the world’s third-biggest chemicals group, has been Britain’s most acquisitive company in the past decade as it built itself into an international company with sales of $45 billion.

Even so, it has been hit by the economic downturn and is now being forced to accept new terms from a 230-strong bank syndicate.

Its annual interest for £6.4 billion of senior debt will jump from £534m to £666m. The rise comes as ebitda (earnings before interest, tax, depreciation and amortisation) is forecast to drop to £940m this year. The group, which is being advised by Lazard, has also been hit for one-off fees of £57m.

Ineos has agreed outline terms to restructure its debt with the leaders of the syndicate, but tomorrow, Ratcliffe will make a presentation to 600 bankers at London’s Gibson Hall. These are the biggest refinancing talks for a single company to take place in this country.

Ratcliffe is confident his company can trade through the downturn, but has been forced to cut costs sharply. He has also seen an increase in demand for chemicals in the past few weeks.

Ineos’s 15,000 global employees have had to accept a pay freeze and eschew bonuses. The capital spending programme has been cut by two-thirds and some £341m of costs have been taken out of the business in the past six months. The use of contractors has been cut from 10,000 to about 3,000.

The group has presented a five-year plan to its banks to demonstrate how it can return to the level of profitability enjoyed in 2007 when it made ebitda of £1.7 billion. In an exclusive interview Ratcliffe said: “We won’t get back to those levels until 2011 at the earliest.”

He is not criticising the banks for raising the interest rate dramatically. He said: “This is not an attack on the banks, this is a fact of life.”

At the peak of Ineos’s success, Ratcliffe was among the country’s 10 richest people, worth over £2 billion.

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