Cash-strapped NiQuan Energy appoints receiver

NIQUAN Energy has announced the appointment of a receiver to manage and control the company’s assets.

The receiver, Varune Mungal, was appointed on October 10, more than a year after a court ordered NiQuan to pay former vice president David Small over $20.5 million in damages and interest for a breach of contract relating to unpaid sums and a mutual separation agreement with the company when he left in November 2021.

Small has since sought the company’s liquidation to enforce the payment order.

Mungal’s appointment was published in a newspaper notice on October 27.

NiQuan Energy was founded in 2014 by Ainsley Gill and other businessmen and industry veterans and sought to become a leading producer of low-carbon, synthetic fuels from natural gas and renewable energy.

NiQuan Trinidad is a subsidiary of NiQuan Energy LLC, registered in the US.

NiQuan Trinidad drew attention and financial backing for its promise to support the country’s energy diversification goals.

In 2018, the company took over the stalled gas-to-liquids (GTL) plant project from the World GTL and Petrotrin joint venture.

However, NiQuan encountered operational disruptions, including an explosion at the plant in April 2021, causing a temporary shutdown, and raising concerns about safety practices.

Struggling with recurring financial challenges, NiQuan collaborated with PricewaterhouseCoopers to develop a rehabilitation plan to reduce its debt and stabilise the business.

Its primary creditor, Republic Bank, has indicated support for liquidation if rehabilitation efforts are unsuccessful.

Mungal’s appointment as receiver may lead creditors to explore liquidating NiQuan’s assets to recover funds or working with him to stabilise the company financially if a recovery plan appears viable.

Under the terms of specific legal agreements – debentures with lenders established between 2018 and 2023 – NiQuan’s assets were designated as collateral, enabling the receiver to manage these resources.

The recent termination of NiQuan’s gas supply contract with state-owned energy company TT Upstream Downstream Energy Operations Co Ltd (TTUDECOL) has compounded uncertainty surrounding NiQuan’s future.

The two parties’ relationship deteriorated because of unpaid gas supply invoices. NiQuan reportedly owed TTUDECOL over US$21 million, which led TTUDECOL to terminate its gas supply contract with NiQuan in August 2023.

TTUDECOL sources gas from the National Gas Company (NGC) and as a result of NiQuan's debt, TTUDECOL also accumulated significant debts to NGC.

NiQuan’s executives have sought moratoriums and additional funding to sustain operations.