Grangemouth analysis: Who would want to buy plant?
But it is hard to see why another firm might want to buy the beleaguered plant when Ineos will have spent a long time considering all the options, including selling it off. If disposing of the facility was a realistic prospect, Ineos would have taken steps to avoid alienating the workforce and weakening its bargaining power.
The bottom line is, Grangemouth is not commercially viable as things stand: a fact that has been underlined by recent events – Ineos would be sending out a very different message to potential purchasers, not advertising the fact the facility has become a millstone around the company’s neck. It might be argued, however, that the shutdown of the refinery, only the second in its 40-year history, and the public spat with Unite, whose 2008 strike caused the previous shutdown, have not weakened Ineos’s position when it comes to the government, or governments.
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Hide AdAlthough any loans or grants would need to satisfy EU guidelines on state assistance, the firm is certainly doing a good job at scaring the politicians.
As it stands, PetroChina, which already owns 50 per cent of the Grangemouth facility, looks like the only real contender for a possible sale.
Although the company would face the same financial challenges as any other, an acquisition could form part of a canny strategic move with an eye on the longer term.
• Douglas McNeill is investment director at Charles Stanley stockbrokers.