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Friday, May 2, 2025

S&P downgrades TCL for debt default

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20141007

Stan­dard & Poor's (S&P) cred­it rat­ing agency has down­grad­ed Trinidad Ce­ment Ltd (TCL), af­ter the com­pa­ny, based at Clax­ton Bay in Trinidad, failed to make debt pay­ments on Sep­tem­ber 30.

"We are low­er­ing our cor­po­rate cred­it rat­ing on TCL to 'D' from 'B,'" Mex­i­co-based S&P an­a­lysts Fer­nan­da Her­nan­dez and Luis Manuel Mar­tinez said in a rat­ing re­leased late Fri­day evening.

With its 'B' rat­ing, the Caribbean ce­ment mak­er was al­ready deemed "high­ly spec­u­la­tive" or five notch­es deep in­to "junk" but S&P has fur­ther down­grad­ed the com­pa­ny which is now led by act­ing CEO Ale­jan­dro Ramirez, a Ce­mex ex­ec­u­tive. Mex­i­co-based Ce­mex is the largest ce­ment mak­er in the re­gion.

Giv­ing their ra­tio­nale, the S&P an­a­lysts said: "The down­grade re­flects TCL's missed debt ser­vice pay­ments due Sep­tem­ber 30, 2014. Such ma­tu­ri­ties are not sub­ject to a grace pe­ri­od and we do not ex­pect pay­ment with­in five busi­ness days, which Stan­dard & Poor's con­sid­ers an event of de­fault as per its cri­te­ria.

In ad­di­tion, the down­grade re­flects TCL's Sep­tem­ber 29, 2014, no­tice to stake­hold­ers, in which the com­pa­ny in­forms that all pay­ments due un­der the ex­ist­ing re­struc­tured loan agree­ments would be placed on hold."

In the Sep­tem­ber 29 no­tice to which S&P re­ferred, TCL said com­pa­ny rep­re­sen­ta­tives met with "its lenders for the pur­pose of up­dat­ing them on the present state of the com­pa­ny. Price­Wa­ter­house­C­oop­ers, which has been com­mis­sioned by the board to con­duct the fi­nan­cial as­sess­ment of the com­pa­ny, pre­sent­ed its ini­tial find­ings at the meet­ing.

"Sub­se­quent to the meet­ing, the board of di­rec­tors took a de­ci­sion to place a hold on all pay­ments due un­der the ex­ist­ing re­struc­tured loan agree­ments and pro­posed a 'stand­still.' A com­pre­hen­sive re­struc­tur­ing plan will be sub­mit­ted by Oc­to­ber 31, 2014, and will in­clude ac­tions to pre­serve the on­go­ing op­er­a­tions of the com­pa­ny, and to en­sure its over­all long-term vi­a­bil­i­ty."

The down­grade is the lat­est prob­lem for the ce­ment com­pa­ny. On Sep­tem­ber 23, Group CEO Dr Rollin Bertrand, who had been sus­pend­ed by TCL's new board, was ter­mi­nat­ed.Bertrand, along with chair­man Andy Bha­jan, Car­los Hee Houng, Bevon Fran­cis, Leonard Nurse and Bri­an Young, ten­dered their res­ig­na­tions min­utes be­fore a group of share­hold­ers met to have them re­moved at a Au­gust 19 spe­cial com­pul­so­ry meet­ing held at the Radis­son Trinidad in Port-of-Spain. Al­though he re­signed as di­rec­tor at the spe­cial meet­ing, Bertrand re­tained his po­si­tion as CEO.Mem­bers of the new TCL board are busi­ness­man Wil­fred Es­pinet, re­tired pub­lic ser­vant Al­i­son Lewis, Ja­maican busi­ness ex­ec­u­tive Chris Dehring, at­tor­ney Glenn Hamel-Smith, UTC ex­ec­u­tive Nigel Ed­wards and Ce­mex ex­ec­u­tives Car­los Palero and Fran­cis­co Aguil­era.


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