The Guardian - 29.08.2019

Section:GDN 1N PaGe:39 Edition Date:190829 Edition:01 Zone: Sent at 28/8/2019 20:06 cYanmaGentaYellowb

Thursday 29 Aug ust 2019 The Guardian •

Financial^39

Ineos turns to US fracking

sites as UK fails to deliver

Jillian Ambrose

Sir Jim Ratcliff e, one of Britain’s richest
men, has set his sights on the US shale
industry as his fracking ambitions in
the UK wane.
The owner of the petrochemicals
company Ineos is on the hunt for shale
gas investments within the US frack-
ing heartlands of the Permian Basin,
according to sources.
The billionaire industrialist is
understood to have begun assessing
a number of US shale projects over the
summer as part of a multi-billion-dol-
lar debut in the US oil and gas industry.

The sources confirmed reports

that Ineos’s new fossil fuel frontier

would include a bid for $1.5 bn worth

of oil fi elds in the Gulf of Mexico,

which were put up for sale this year

by ExxonMobil.

The company is also hoping to fol-

low the likes of Exxon, Chevron and

Shell into the US shale industry, which

promises quick returns on low cost oil

and gas, the sources said.

A spokesman at Ineos’s Swiss

headquarters declined to comment

on “rumour and speculation”. Ineos

already imports US shale gas to its

Grangemouth refi nery in Scotland in

the form of ethane, which it breaks

down into ethylene to use to make

plastics. The company had hoped to

develop its own shale gas projects on

British soil to cut the costs of shipping

gas across the Atlantic.

But its projects across Yorkshire, the

East Midlands and Cheshire have been

cast in doubt after all three regions

rejected its applications.

Ratcliff e has railed against the gov-

ernment’s “unworkable” earthquake

He has also said Holyrood’s deci-

sion to rule out fracking in Scotland

“beggars belief ”.

Progress at Ratcliff e’s sites in Eng-

land have also stalled. Earlier this

summer Ineos launched an appeal

after Rotherham council twice turned

down applications to test for shale on

a site at Woodsetts. Ineos heard last

month that the decision would be

postponed until 2020.

Ratcliffe vowed in late 2014 to

become the UK’s biggest shale player

by investing $1bn in developing new

shale projects in Scotland and the

north of England. The company prom-

ised “substantial further investment”

if the projects went on to produce gas,

including a 6% cut of its revenues for

local communities.

Ratcliff e, a Brexit supporter, moved

to the tax haven of Monaco last sum-

mer just months after he was knighted

by the Queen for “services to business

and investment”.

Sarah Butler

Peloton, a hi -tech exercise bike busi-
ness that aims to be the Netfl ix of
fi tness, is to be fl oated with a potential
value of up to $8bn (£6.5bn), despite
revealing hefty losses.
The New York-based fi rm, whose
celebrity fans include David Beckham
and Hugh Jackman, has fi led docu-
ments that reveal a plan to raise $500m
on the US’s Nasdaq stock market along-
side losses that jumped to $195m – up
from $48m a year before.
Peloton will be the latest loss-^
making hi-tech “unicorn” to burst on
to the market this year, following the
ride-hailing apps Lyft and Uber, the
scrapbook site Pinterest and the work-
place messaging service Slack.
The company, founded in 2012
by John Foley , a former executive at
the Barnes & Noble books chain , was
valued at $4bn last summer after rais-
ing $550m from investors led by the
private equity fi rm TCV, which has
previously backed Netfl ix, Spotify
and Facebook.
Peloton lets fans of spin classes –
indoor cycling – work out in a gym
or at home using a £2,000 bike fi tted

with a screen on which subscribers

can live stream or download classes. It

launched in the UK last year and plans

to enter Germany this year. There are

also running options using treadmills

and yoga classes.

Subscribers in the UK pay £39 a

month for access to the online classes.

They are fi lmed at the company’s Man-

hattan or London studios and spinners

can interact with instructors and other

Peloton members. An alternative

£19.49-a-month digital-only service

gives access to fi tness classes including

spin sessions, without the equipment

or interactive element.

“On the most basic level, Peloton

sells happiness,” the company says in

documents for its fl otation plans.

Foley said: “Peloton is so much

more than a bike – we believe we have

the opportunity to create one of the

most innovative global technology

platforms of our time.”

The company says it has the

Fitness

bike fi rm

Peloton

is latest

‘unicorn’

to fl oat

despite

big losses

using more than 1,000 songs by artists

such as Drake, Lady Gaga, Katy Perry

and Rihanna, after a $150m copy right

lawsuit was fi led by 10 music publish-

ers earlier this year.

David Minton, a fi tness market ana-

lyst at the Leisure Database Company,

said Peloton stood out as a more pro-

fessional operator than some rivals.

But he added that a number of rival

products were preparing to enter the

market. An established New Zealand

fi tness brand, Les Mills, has teamed up

with the exercise-bike maker Stages to

off er a service similar to Peloton’s in

UK gyms. Studio Sweat off ers an app

w ith a wide range of virtual workouts

including spinning, yoga and weight

training, while Zwift off ers virtual

training rides that can be used with

any exercise bike or road bike fi tted to

an indoor trainer device. Technogym,

an Italian gym-equipment fi rm, has

also announced a bike with an inter-

net-connected screen.

potential to sell 14m of its bikes across

the US, Canada and the UK and is

attracting buyers who would not pre-

viously have considered buying fi tness

equipment.

Documents filed by the com-

pany this week reveal that Peleton’s

revenues more than doubled this year

to $915m.

Carolina Milanesi , a tech analyst at

Creative Strategies in San Francisco,

said Peloton’s mix of a device with

a social “eco system” made it more

 Peloton says it

sells ‘happiness’

to users who can

buy the fi rm’s

exercise bike and

subscribe to its

live streamed

fi tness classes

rules, which force fracking to stop for

18 hours if the work triggers a tremor

which registers higher than 0.5 on the

magnitude scale.

He accused ministers of “playing

politics with the future of the country”

by implementing a planning system

that he said was “archaic, glacially

slow, inordinately expensive and vir-

tually unworkable”.

 The Gulf of

Mexico, left, is

Ineos’s new fossil

fuel frontier

resilient and attractive to investors

than tech companies that relied solely

on a piece of hardware.

“Hardware is the part that others

can copy or follow or even make bet-

ter but the eco system and software

and fanbase is not something that is

easy to replicate,” she said , adding that

Peloton could be seen as more attrac-

tive than the likes of Uber, whose

expansion plans are being limited by

government legislation around the

world, or Pinterest, whose users are

largely female, and so is viewed as

lacking broad appeal.

Investors, however, are likely to be

concerned by Peleton’s losses, which

tripled in the past year. The company

also has a limited trading history,

having sold just 577,000 bikes and

treadmills by June this year, most of

which are in the US. It has 511,202 pay-

ing subscribers of more than 1 million

members who signed up since launch.

The company was forced to stop

‘Hardware others can

copy but the Peloton

software and fanbase

is not easy to replicate’

Carolina Milanesi

Tech analyst

$8 bn

$4bn

Potential value

of Peloton once

it has fl oated

on Nasdaq

The value put

on the company

last year after

it raised $550m

from investors

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