Trinidad Petroleum Holding Co Ltd is disassociating itself from a Reuters article published on Tuesday claiming the company was renegotiating its debt.
“I only comment to say we, our board at Trinidad Petroleum, is in no way associating with that article. We have no responsibility (regarding) it. We are not in a position to give any information on our finances,” Trinidad Petroleum chairman Wilfred Espinet told Newsday in a brief telephone interview. Asked when the company might be in such a position to comment, Espinet said he would not speculate on a timeline.
The article suggested that the company, a new entity created out of the restricting of Petrotrin, is in advanced debt restructuring talks with banks and has secured new loans of up to US$1.4 billion, based on projected oil reserves, to ease the looming US$850 million bond due to mature in August.
The report cited unnamed sources “familiar with the matter” and acknowledged that attempts to reach Trinidad Petroleum for comment were unanswered.
The fact that the company is restructuring its debt is not new, however, as Espinet and government officials have said the company would look to restructure, and more importantly, attempt to service its debt on its own, without a government guarantee.
The article said international investment banks Morgan Stanley, Credit Suisse, Panamanian trade bank Banco LatinoAmericano de Comercio Exterior (Bladex), and local lenders First Citizens Bank and Ansa Merchants Bank are arranging approximately US$1.2 billion -US$1.4 billion in loans.
These funds will finance costs related to closing the refinery, severance pay for workers (previously announced to cost nearly TT$2 billion) and cover the bond.
Reuters claimed Trinidad Petroleum will secure financing with proven oil reserves as collateral, again something the company had alluded before, but the article said the government was reluctant to guarantee the funds because of the possible impact on its credit rating. It added that Trinidad Petroleum has secured working capital credit lines from local banks including Republic, and that these short-term lines, valued between US$178 million and US$195 million in total, are guaranteed by the government.
Petrotrin, and the government’s implicit guarantee of the company’s debt as a state enterprise, has been a constant weight on the country’s sovereign debt rating, although the most recent reports have acknowledged attempts to restructure the company and its debt as moves in the right direction.
Newsday sought to clarify the article with Finance Minister Colm Imbert but he declined to comment.
The article also suggests that the government has retained Scotiabank to oversee the sale of the refinery, and possible bidders include mining giant Glencore, Canadian petroleum marketer Parkland, and ExxonMobil, which is set to start commercial production out of Guyana next year. The Ministry of Energy did not immediately respond to Newsday’s request for comment.