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It's critical for refinancing of Petrotrin's (US)$850 million bond payment to be done without delay and requests for proposals will be issued next month, says Petrotrin chairman Wilfred Espinet.
“With the process in train now, we anticipate we should have an idea of where the matter stands in about two months," Espinet added.
Espinet spoke to the Guardian yesterday after Energy Minister Franklin Khan rejected the Oilfield Workers' Trade Union's plan to save the embattled company. Khan said Government has started preliminary discussions to refinance Petrotrin's (US) $850 million bond.
The international bond, which involves foreign investors, is one of the priority issues facing the company whose refinery Government intends to close in two weeks. Citing losses, an August 28 Petrotrin statement stated the plan is to end its Pointe-a-Pierre oil refining operations and entirely redesign its Exploration and Production section to curtail losses and "get Petrotrin on a path to sustainable profitability".
The statement added, “Approximately 2,600 permanent jobs will be affected—the redesigned Exploration and Production business will have approximately 800 workers and all 1,700 jobs in refining will be terminated.”
The company has cited the bullet repayment on the (US)$850m bond—due in 11 months—among Petrotrin's major financial challenges. That bond was obtained in 2009 for the Gas Optimisation plan. Petrotrin also has a (US)$750m bond repayment due May 2022. That was obtained in 2007 for the Ultra Low Sulphur diesel plant.
After Khan spoke on the refinancing move last Friday, Espinet said they are already in process “testing the temperature”—doing various models and examining what options are available and what needs to be done.
”Then we'll issue a request for proposals for refinancing by October. It will take a little time but we anticipate that within the next two months we should have an idea of where we are on the situation.”
The team is working to ensure no delays on the matter. Espinet said the matter was urgent. He said if T&T cannot demonstrate the ability to have a solution on the refinancing, it could affect this country's national debt and have negative economic consequences. "Foreign investors must have confidence in our systems," he added.
Espinet explained refinancing wouldn't halt the refinery closure since the closure was a necessary part of the refinancing process and it was out of that model, the Board would present its position to financiers.
The closure was also the basis on which the restructuring of the company had to be done, he noted.
No talks yet on separation packages
After Government's final declaration last week that the refinery will be closed, Prime Minister Keith Rowley mandated that company and union start working out workers' separation packages.
With the clock ticking to the October 1 refinery closure date, Espinet said financial and psychological counselling was being provided to workers, but talks with OWTU on the packages haven't started yet. “This (packages) must go through a process—we need to talk to the union first.”
His Board meets Wednesday with OWTU—but that's on OWTU's plan to save the company.
Espinet said his team has been working out OWTU's plan to assess the viability of its numbers and model since that wasn't evident.
Noting part of the proposal calls for the increased number of workers, he said his team had done an exercise which showed that even with reducing refinery numbers to a minimum—by approximately 47 per cent—it still couldn't make money. Espinet said he understood clearly when he took the chairmanship last year, that his job would be tough.
'House of mourning inside Petrotrin'
Yesterday, OWTU's Education Research officer Ozzie Warwick said discussions with the company on workers' separation packages "...Is not on our (OWTU) agenda. We're focusing on trying our utmost best to get our plan to save the company in motion and save the entire entity so it would not come to a point of needing to cut jobs and give workers separation packages."
Petrotrin (Trinmar) worker Chankar Teelucksingh said, "The feeling inside Petrotrin right now is like a house of mourning when someone dies—people are in a state of uncertainty, don't know what's going on. We're unsure of what the separation aspect may involve, what people may get or how.
"There are concerns about workers' medical and pension plans, study grants, and what'll become of their housing benefits (for people with mortgages) and letters of commitment if we go to financial institutions."
Outside of Petrotrin, some suppliers to the company yesterday expressed concern about getting paid for their goods before the October 1 refinery closure. A few have considered holding back goods until they get a letter of assurance from Petrotrin that payments will be made and any order that cannot be delivered by month end will be cancelled.
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