Trinidad Cement Company is "close" to an agreement with its major creditors that its latest disclosures suggest will allow the group eight years to pay its debt but also appears to impose a new level of austerity on the regional operation that denies it use of excess cash.
The restructuring plan will cost TCL in higher interest rates beyond the current band of 6-9.7 per cent last disclosed over a year ago in annual financial reporting by the cement maker, as well as an unspecified "consent fee" to the holders of its debt.
The draft plan that is now the subject of intense negotiations covers an estimated 73 per cent of TCL’s TT$2.6bn of liabilities.
Company secretary Alan Nobie declined this week to name the debtholders, but former disclosures have tagged World Bank affiliate IFC and Republic Finance & Merchant Bank among them, both of which previously made concessions to TCL Group back in late 2009 when they agreed to relax performance benchmarks on liquidity and short-term borrowing limits.
Then the bonds, loans, project financing and swaps had maturities extending up to 12 years, more than half of which were due for redemption in four years. Much of the debt is collateralised by the cement group’s fixed and floating assets.
TCL says the talks to finalise the draft agreement, the crafting of a term sheet and legal documentation cementing the restructured debt programme should wrap up within the third quarter ending September 2011.
"We’re very close," said Brian Young, the chairman of Kingston-based Caribbean Cement Company Limited as well as director on TCL group’s board.
"We have one or two I’s to dot and T’s to cross," Young told the Financial Gleaner on Tuesday, fresh from a round of robust meetings the week before to narrow differences between TCL and its, he said, "polyglot" of Caribbean and international lenders, among them Citibank and IFC.