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Financial News

Jan 2011 Financial News

TCL, creditors agree to freeze on debt repayment

Jan 19, 2011

Cement producer Trinidad Cements Limited (TCL) will freeze the servicing of its TT$1.2 billion ($16.1 billion) debt whilst the loss making entity restructures, management released Monday.

The company hit by the economic downturn announced a five-point plan that involves a revised business plan, restructuring the company's debt, establishing a creditor committee comprising large domestic and international institutional lenders; and hiring of an independent advisor to the committee to assess the cash generating capability.

TCL which ultimately owns local based Caribbean Cement recorded a TT$77.4 million loss ($1 billion) for its latest September quarter versus profit of TT$12.9 million ($173 million) in the 2009 corresponding quarter.

"It is expected that this exercise will continue until the debts are restructured, during which time the group will declare a moratorium on debt service payments (both principal and interest) in order to preserve cash to sustain operations," stated the company stated in its release.

This approach was approved by the Board of TCL at a meeting held on January 14, 2011, and is "fully supported by the major lenders" since it will facilitate the TCL Group`s efforts to sustain itself and its operations over the current low level of the economic cycle, it stated.

A big part of the long-term debt is associated with US$105 million project financing of the expansion of Carib Cement, for which semi-annual repayments commenced primarily in 2010. Additionally, US$25 million of commercial paper issued in December 2008 is to be repaid in one payment in December of this year.

Jamaica Observer
Wednesday January 19, 2011