Apr 2015 Financial News

MASSY - Notice of Material Change

Apr 17, 2015

NOTICE OF EXECUTION OF A PROJECT AGREEMENT FOR THE ESTABLISHMENT OF A NATURAL GAS TO PETROCHEMICALS COMPLEX AND INVESTMENT IN A 10% STAKE IN CARIBBEAN GAS CHEMICALS LIMITED

1. EXECUTION OF THE PROJECT AGREEMENT (“PA”) FOR THE ESTABLISHMENT OF A NATURAL GAS TO PETROCHEMICAL  PROJECT, APRIL 10, 2015

On April 10, 2015, Massy Holdings Ltd. (“MHL”) entered into a PA for the Establishment of a Natural Gas to Petrochemicals Complex. The PA is in respect of a Project that proposes the construction, ownership and operation of a petrochemicals complex at Union Industrial Estate in La Brea, Trinidad. The Project will be utilizing approximately 100 million standard cubic feet per day of natural gas, with the first phase being the construction, ownership and operation of the 1,000,000 metric tonnes per year Methanol and 20,000 metric tonnes per year Dimethyl Ether plants, with the corresponding sale and marketing of the products.

MHL entered in the PA with the following parties:-

1. The Government of the Republic of Trinidad and Tobago (“GORTT”);
2. The National Gas Company of Trinidad and Tobago Limited (“NGC”);
3. Mitsubishi Gas Chemical Company Inc. (“MGC”);
4. Mitsubishi Corporation (“MC”);
5. Caribbean Gas Chemical Limited (“CGCL (T’dad)”); and
6. Caribbean Gas Chemical (Barbados) Limited (“CGCL (B’dos)”).

The PA commenced on the Execution Date (April 10, 2015) and sets out in detail the proposal made by MC, MGC and MHL for the Project, with the necessary undertakings to achieve its implementation and operation. The PA also recognises the approvals and fiscal incentives, import concessions, undertakings, representations, warranties and assurances required to be provided by GORTT and NGC for the Project. The PA also provides for the obligations of MHL as a Shareholder.

The Project will be facilitated through the project company CGCL (T’dad) through which MHL will ultimately hold a 10% investment in the Project. The Shareholders of CGCL (T’dad) shall be CGCL (B’dos) (80%) and the NGC or its affiliate (20%). MHL, through its 100% owned subsidiary Massy Energy (Trinidad) Ltd. which in turn has a 100% shareholding in the International Business Corporation, Massy Energy (Barbados) Ltd. which will own 12.5% of the shares in CGCL (B’dos). Japan Trinidad Methanol Co., Ltd. (“Japan Trinidad”) will hold the remaining shares (87.5%) in CGCL (B’dos). The Shareholders of Japan Trinidad are: MC – 37.5%; MGC – 37.5%; Mitsubishi Heavy Industries Limited – 25%

2. INVESTMENT IN A 10% STAKE IN CGCL (T’DAD)

The Shareholders have agreed to invest their respective portions of the equity investment, of which MHL’s portion is Thirty Million, Four Hundred and Fifty-Two Thousand United States Dollars US$30.452 Million, which is 10% of 30% of the Total Project Cost. These funds will be used to commence the Engineering, Procurement and Construction works as well as to cover the operating costs of CGCL (T’dad) during the construction period.

MHL’s income from this project will take the form of dividends from the operational entity and also, from the sale of Methanol on the world market. This is an attractive and viable investment for MHL which is expected to bring further opportunities and synergies for companies throughout the Massy Group.

This Notice is published in accordance with Section 64(1)(b) of the Securities Act, 2012

Source:
The Trinidad and Tobago Stock Exchange Limited
Friday April 17, 2015