Feb 2015 Financial News

TCL signs deal with Cemex affiliate

Feb 11, 2015

Trinidad Cement Limited (TCL), which got approval late Monday to remove a 20 per cent restriction on shareholding, has signed a subscription agreement with Sierra Trading, an affiliate of Mexican cement giant Cemex. Under the agreement, Sierra will participate in TCL’s upcoming rights issue and has committed to additional capital via an agreement to underwrite the raising of capital up to a maximum of US$45 million. This will ensure that TCL meets a capitalisation target of at least US$50 million.

TCL has agreed to grant an exclusive right to Sierra to subscrbe and purchase any shares in the rights issue which are not taken up by shareholders. However, the amount should not cause Sierra’s shareholding in TCL to exceed 40 per cent of the local cement company’s outstanding shares. If after the rights issue Sierra has not achieved at least 35 per cent shareholding in TCL, a private placement of shares in the company will be issued.

The agreement was signed on Monday. Sierra currently holds 20 per cent of TCL’s share capital. 

TCL is embarking on a comprehensive restructuring plan aimed at preserving its ongoing operations of the company and ensure its overall long-term viability. The plan is being spearheaded by a new TCL board installed late last year, headed by businessman Wilfred Espinet and including retired public servant Alison Lewis, Jamaican business executive Chris Dehring, attorney Glenn Hamel-Smith, UTC executive Nigel Edwards and Cemex executives Carlos Palero and Francisco Aguilera.

Late last year, the company put a hold on all payments under a debt deal struck with large creditors after being unable to cope with $1.7 billion in short-term debt on which it had defaulted. 

In a related development, Opposition Leader Dr Keith Rowley has appealed to government to keep TCL in local hands. He said a PNM government is committed to reviewing development of a rapid rail system for T&T and if it got the go ahead, TCL will become a major player providing serious amounts of cement over the five to seven year period it would take for the project to be completed

“It will be the tax payers who will have to pay more if TCL is in the hands of a foreigner who will be in a position to determine a monopoly price as against a locally indigenous company that is taking part in indigenous development,” Rowley said.

Source:
Trinidad Guardian
Wednesday February 11, 2015

http://www.guardian.co.tt/business/2015-02-11/tcl-signs-deal-cemex-affiliate