The chemical sector may be particularly vulnerable to conditions created by the credit crisis, according to some observers. Private equity companies have purchased many chemical companies in the past five years, resulting in a highly leveraged industry. UK-based Ineos Group’s ratings outlook was recently downgraded by S&P. Rising costs for petrochemicals, oil and commodities have not been easy for chemical firms to immediately pass on to customers, resulting in tighter cash flows. In addition, new facilities in the Middle East scheduled to come on line next year could lead to overcapacity in the petrochemicals market. Publicly listed companies, which tend to have less debt, could respond by restructuring. Source: Financial Times

< | >