TCL enters into loan agreements to refinance debt

TRINIDAD Cement Ltd (TCL) said it has entered into three loan agreements to an aggregate principal amount of $270 million to refinance $226.75 million of its existing debt.

In its 2018 annual report, then TCL Group chairman Wilfred Espinet said the group “continued to renegotiate its loans to align the maturity profile and currency mix with the medium term cash generation requirements and to maintain flexibility to meet its funding needs.”

He said TCL entered into two loan agreements on July 24, 2018.

The first was with Citibank (TT) Ltd for a principal of $110,000,000.

The second was with First Citizens Bank Ltd (FCB) for an aggregate principal of up to $210,000,000.

Espinet said, "The proceeds of these loans are being used for general corporate purposes as well as the prepayment of the April 26, 2017 loan, which TCL had with FCB."

He added, "In keeping with our strategy of aligning our debt servicing obligations, CCCL (Caribbean Cement Company Ltd) negotiated a JMD$3 billion loan with NCBJ on November 30, 2018.

"Proceeds of this facility were used to pay down US$23.6 million, which reduces CCCL’s US dollar debt."

In its 2020 annual report, current chairman David Inglefield said, "The group’s response to uncertainties and challenges of the covid-19 pandemic, compounded by difficult regional economic conditions, has been notable, resulting in a net income of $15 million."

Annual operating earnings before other expenses, he said, were $290 million, "an increase of 30 per cent compared to 2019."

These results, Inglefield said, "were generated from annual revenue of $1.7 billion, a one per cent increase over 2019, primarily due to the strong demand for cement in Jamaica."

The annual financial expense of $122 million, he continued, represented a 26 per cent increase compared to 2019. He attributed this mainly to foreign currency losses incurred last year.

In 2020, Inglefield said, the TCL Group generated $363 million in cash from operating activities, "which resulted from efficient working capital management, and consistent with the group’s initiative to reduce debt, $248 million of long-term debt was repaid during the year."

In a notice on June 22, TCL said it entered into a loan agreement with Republic Bank for $67.5 million, a loan agreement with RBC Merchant Bank (Caribbean) for $67.5 million and an amendment and restatement agreement to its loan agreement of July 24, 2018 with Citibank (TT) Ltd for $135 million.

TCL said the proceeds from the loans granted under the agreements will be used to repay the entirety of TCL’s debt under the Citibank original loan, with a principal amount of $110 million, and the entirety of TCL’s debt under its loan agreement dated July 24, 2018 with FCB.