Sep 2005 Financial News

RBTT tries US$13M liquidation sale

Sep 15, 2005

The assets of a Guyana company, that owes RBTT and Development Finance Limited (DFL) sums in excess of US$13M, have been put up for sale.

According to the Starbroek news, after years deep in debt, the sale of the assets of the beleaguered Mazaruni Granite Products, a former state-owned quarrying company Limited (MGPL), could signal the end of attempts to keep the company on the market as a going concern as its main creditors seek to recoup.

The company, even in receivership is functioning though not to the best of its abilities, said the paper. Its operational aspect is being handled by receiver Maurice Solomon and Company, whom the (RBTT) Merchant Bank had in May 2003 appointed.

Solomon’s appointment came after MGPL experienced financial difficulties and defaulted on its loan obligations in 2001.

Up to April, Solomon had been still holding out for the right buyer since creditors were breathing down the company’s neck for their money.

As at December last year, the company had been meeting its obligations to its workers and debtors despite sliding into receivership in 2003. Solomon had said then that when the company got itself into a good position it would have been sold. The paper, in its article said, that the two banks in Trinidad that the firm owes gave approval for the sale of the company’s assets. He said too that these would be the assets that were covered under the banks’ debentures.

According to the advertisement, the closing date for the submission of bids is October 7.

MGPL started operations under the stewardship of managing director Peter Cummings at the Teperu quarry in the Mazaruni River in 1997, taking over from Guyana Granite Products Ltd (GGPL). GGPL had taken over the state-owned quarry. Observers have noted that the quarry with a capacity of three million tonnes per year was simply too large for Guyana’s needs and shipping stone to Caribbean islands was uneconomical. MGPL had mobilised investment from a number of persons locally and DFL of Trinidad also had a small equity stake in it and had extended US$3M in credit to the company.

A senior RBTT official had visited in 2003 to determine whether the local quarry industry was interested in acquiring MGPL’s assets but talks were not fruitful. The official has also met with government officials following a request from the government to defer the planned foreclosing of MGPL as several large infrastructural projects were coming on stream.

The delay in getting these projects rolling had been cited as one of the reasons why MGPL encountered serious difficulties. Several of these projects, including the East Bank Highway and the Timehri to Rosignol bridges project have now come to an end and as a consequence there is likely to be a steep drop in demand for quarry products.

Up to June last year, the company still had around 100 workers on its payroll and it was scouting markets in the Caribbean.

The Trinidad Newday
Thursday, 15th September, 2005
http://www.newsday.co.tt/business.php