(Trinidad Guardian) In a notice to shareholders in the press on Tuesday, Trinidad Cement Ltd (TCL) announced that it had “declared a moratorium on debt service payments (both principal and interest) in order to preserve cash to sustain operations.”
The cement producer, the only one in the Caricom region, said that its suspension of all of its debt payments will continue until it has completed its debt restructuring exercise, which it announced in its interim financial report for the nine months ending September 30, 2010. In the statement, TCL said that the debt restructuring was being undertaken to allow the Group’s operation to be funded from the lower income streams resulting from the severe effect of the current economic decline in all TCL’s markets.
It outlined the approach that is being taken:
• A creditor committee comprising large domestic and international institutional lenders representing 75 per cent of the TCL’s total debt, has been established.
• Hiring of an independent advisor to the committee to assess the cash generating capability.
• TCL, the committee and the advisor to discuss a revised business plan and to negotiate a restructuring of the company’s debt portfolio.
• TCL in co-ordination with the committee along with its advisor will present for approval the debt restructure plan to its lenders and approval.
According to TCL, the debt restructuring is intended to improve the company’s long-term prospects and “provide for the full repayment of its indebtedness.
The statement said that the “process outlined above is fully supported by the major lenders since it will facilitate the TCL Group’s efforts to sustain itself and its operations over the current low level of the economic cycle.” It was not immediately clear from the statement whether the major lenders “fully supported” the suspension of all debt service payments or the establishment of the creditor committee and the hiring of an independent advisor.
