Imbert: Govt guaranteed $2.6b in Petrotrin loans in six months

FINANCE Minister Colm Imbert says in six months Government has guaranteed more than $2.5 billion in loans for Petrotrin.

He was piloting the Miscellaneous Provisions (Heritage Petroleum, Paria Fuel Trading and Guaracara Refining Vesting) bill in the House of Representatives yesterday. The bill is aimed at divesting some of the assets of Petrotrin in three companies: Heritage Petroleum in Santa Flora and Point Fortin which will manage exploration and production; Paria Fuel Trading in Pointe-a-Pierre for fuel trading and product supply activities, as well as logistics, terminalling and product handling; and Guaracara Refining which will preserve the refinery assets and provide utility services to Petrotrin and Paria.

Petrotrin remains as a company in existence, will continue to operate and will be a member of the subsidiaries under new holding company Trinidad Petroleum Holding.

Imbert said: “This will allow Petrotrin to meet all of its outstanding contractual liabilities unhindered and will elude the possibility of Petrotrin bond holders imposing a requirement that they approve the new structure of the company.”

He said the survival of Petrotrin has been based on the non-payment of taxes and royalties to the Government and by procuring Government guarantees. He reported total guarantees for this year alone was US $402 million or more than TT $2.6 billion. He reported, as Finance Minister he wrote letters of guarantee on behalf of Petrotrin including: Republic Bank in March for US $50 million; First Caribbean in July for the same figure; for Scotia Bank in August for US $50 million, and also in November 9, (six) days ago; for US $55 million for First Citizens Bank on September 27; and US $25 million for FCB on October 26.

“Every time we do this it increases the public debt.”

Imbert said Petrotrin was owing close to $4 billion to Government in supplementary petroleum tax, other petroleum tax and royalties.

He reported for the refinancing of the US $850 million bond due in August 2019 Petrotrin approached the financial markets in October 2018 to refinance its long-term bonds. He said four respondents were short listed and two consortiums agreed to work together and execute the financing of a combination of the Petrotrin exit costs as well as the 2019 bond and 2022 bond (of US $750 million). The consortium is made up of Credit Suisse, Bladex and FCB as well as the teams of Morgan Stanley and Ansa Merchant Bank.

He said the consortiums were working towards having the first tranche of the exit costs settled by November 30 and bonds refinanced soon afterwards “well in advance of the August 2019 terminal date.”