[UPDATED] Abdulah tells government: Come clean on Patriotic rejection

QUESTIONS are being raised about the shift in government’s policy from an agreed three-year moratorium with a 10-year payback plan for Patriotic Energies and Technologies Co Ltd to an upfront cash payment.

Movement for Social Justice (MSJ) political leader David Abdulah said government must come clean and say if a US$570,265,000 bond issue by Trinidad Petroleum Holdings Limited (TPHL) has changed the original requirement for the refinery purchase.

Reading from the 432-page TPHL document which is available online, Abdulah said the summary of the notes issued at a 9.75 per cent interest for payment due by 2026 would be fully and unconditionally guaranteed on a joint and several-party basis.

“In other words, people would get first, second and third priority to get back their money by the guarantors, TPHL, which includes Guaracara Refinery Company and Paria Fuel Trading Co Ltd,” Abdulah said during a webinar to treat with the rejection of Patriotic’s bid for the sale and acquisition of the Guaracara refinery and port.

“Guaracara is not operating, but it owns the assets of the refinery at Pointe-a-Pierre. Paria owns the assets of the port, tank farms and pipelines which forms part of the acquisition by Patriotic.

According to the summary, the notes and notes guarantees will be secured, subjected to certain exceptions and permitted liens or holds by a first priority security interest.

“Remember what Energy Minister Franklin Khan said about who would have first priority lien? The assets of Guaracara and Paria is the collateral and if the people who lent the money cannot get back their collateral there can be no sale.”

He recalled Ancel Roget, president general of the Oilfields Workers’ Trade Union (OWTU) which owns Patriotic, saying on September 11, this year, that TPHL’s international attorneys confirmed there were major challenges with their internal financing which may be insurmountable based upon the offer made by the Ministry of Finance in September 2019.

“This I believe is the fly in the ointment or the insurmountable problem with respect to internal financing of TPHL," said Abdulah.

“It would appear, therefore, for Patriotic to get this refinery the position of the Minister of Finance Colm Imbert in the Parliament on September 20, 2019, has to change.”

On that date, in a statement to the Parliament, Imbert announced Patriotic as the preferred bidder and would be granted a three-year moratorium on all payment of principal and interest, towards the purchase of the refinery, and ten years, at a fair market interest rate, to complete the payment of US$700 million. He said Patriotic had offered an upfront cash payment of US$700 million plus US$300 million for the non-core assets of Petrotrin, which were not offered by sale.

Abdulah claimed Government was now asking for the cash payment.

“Patriotic offered an upfront cash payment, but government changed that requirement, so why then is purchasing financing an issue now,” he said.

“Government has to come clean on that and not make it appear that Patriotic could not find the money. That is not true. The goal posts were removed not because of Patriotic but because all of a sudden, government found out it had a major problem.”

He said despite the October 31 deadline, which had no legal requirement, Patriotic bent over backwards to submit a document with a letter guaranteed by three executives from one of the world’s top ten banks to provide the cash payment to satisfy the new requirement of purchase financing.

Abdulah said that would take the issue of the lien off the table, but Patriotic has to first get a commitment from government for that to happen.

On Monday, the Prime Minister instructed that the evaluation committee review Patriotic's last submission which Khan on Saturday announced had not met the requirements for purchase price financing, financing to restart the refinery and the lien on the assets. Dr Rowley set November 30 as the deadline for the review of Patriotic's proposal.

This story has been updated with additional details. Below is the original story.

Leader of the Movement for Social Justice David Abdulah has welcomed the Prime Minister’s appointment of an evaluation committee to re-examine the bid by Patriotic Energies and Technologies Company Ltd, which it rejected last week.

Dr Rowley set a November 30 deadline for all reviews of the company's proposal for the acquisition of the assets of the Guaracara refinery.

However, Abdulah said Government must come clean on why it rejected the bid by the company, which is owned by the Oilfields Workers' Trade Union (OWTU).

OWTU president Ancel Roget, a director of Patriotic, had requested an independent evaluation on the basis that the ministerial team did not properly review the complex document.

In a webinar on the issue on Monday night, Abdulah pointed out, "Up to the middle of July, Government was saying it was ready to sign the agreement with the union. Of course, in that period there was election campaigning.

"What caused government to change its mind?”

Abdulah, who sat on several government-appointed committees to assess the former Petrotrin and make recommendations for its restructuring, said the company met all the criteria set out by government, contrary to what Energy Minister Franklin Khan said at a news conference last Saturday.

Khan said the company neglected to meet three key requirements: purchase-price financing, restart financing and the issue of first-priority lien on the assets.

Abdulah read several statements Finance Minister Colm Imbert made in Parliament on Patriotic’s proposal of a US$700 million payment on which government proposed a three-year moratorium.

Abdulah also accused the government of acting in bad faith by making public the rejection of the bid before informing Patriotic.

He said the union bent backwards to meet the "arbitrary" October 31 deadline, but government failed to meet the union and instead Khan chose a news conference to reject the bid.