Monday 25 March, 2019

Petrotrin in jeopardy? Bankers request $1.2B government guarantee

Petrotrin has written to Finance Minister Colm Imbert seeking financial support after concerned bankers requested a $1.2 billion government guarantee from the troubled oil company.

Speaking at a press conference on Monday afternoon, the Finance Minister said he received a letter from Petrotrin informing him that the state-owned company has two financing facilities which need to be urgently refinanced or rolled over on or before October 15.

He explained the banks are seeking guarantees as it views Petrotrin as a risky entity.

“This particular letter informed me, well, informed the Permanent Secretary, who informed me that Petrotrin has two financing facilities which need to be refinanced or rolled over on or before the 15th of October this year which is within the next week.

They have a facility with Duetsche Bank in the amount of US$100 million and a facility with Citi Bank in the amount of US$50 million. They also have a facility with Republic Bank in the amount of US$22.2 million. When you add up all three you get a total of US$172.2 million and when you do the conversion that is TT$1.2 billion,” the Finance Minister explained.

The Finance Minister added the letter informed him that unless the company gets government guarantees for these facilities, the company will not be able to continue to pay its bills.

Imbert said if he didn’t sign the government guarantee, Petrotrin would implode.

However, he added that once he does, the country's debt profile will increase.

“This letter today from Petrotrin advises me as Minister of Finance that unless Petrotrin gets government guarantees for these facilities within the next week, the company will not be able to pay its bills, and essentially will not be able to continue,” he said.

Imbert also weighed in on the Industrial Court ruling on Monday, which granted the Oilfield Worker’s Trade Union an injunction, essentially halting the termination of Petrotrin workers.

The Finance Minister said if the state-owned oil company is not allowed to proceed with its restructuring, there will be profound implications for the entire country.

“But in the interim, while this litigation is taking place, I as Minister of Finance have requests for government guarantees totalling TT$1.2 billion which the company has said their banks have told them they must get within the next seven days.”

 

 

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