In­ter­na­tion­al rat­ings agency Fitch says a mean­ing­ful in­crease in Ce­mex's cur­rent in­di­rect 39.5 per cent own­er­ship of Trinidad Ce­ment Ltd (TCL) would be a pos­i­tive rat­ings trig­ger.

The Mex­i­can com­pa­ny re­cent­ly an­nounced its in­ten­tion to make an of­fer and takeover bid to share­hold­ers of TCL for up to 132.6 mil­lion or­di­nary shares in the Clax­ton Bay ce­ment plant.

If suc­cess­ful, the of­fer will in­crease Ce­mex's cur­rent in­di­rect stake on TCL to up to 74.9 per cent and could re­sult in an up­grade of at least one notch to TCL's 'B-' rat­ing. The of­fer is con­di­tion­al on Ce­mex in­di­rect­ly ac­quir­ing an amount of TCL shares that would al­low it to con­sol­i­date the com­pa­ny. The of­fer is ex­pect­ed to close on Jan­u­ary 10, 2017.

TCL is the lead­ing pro­duc­er of ce­ment in Cari­com, with eight op­er­at­ing com­pa­nies in T&T, Bar­ba­dos, Guyana, Ja­maica and An­guil­la. It has a dom­i­nant mar­ket po­si­tion, par­tic­u­lar­ly in key mar­kets such as T&T and Ja­maica.

As of Sep­tem­ber 30, TCL had gen­er­at­ed US$77 mil­lion of earn­ings be­fore in­ter­est, tax­es, de­pre­ci­a­tion, and amor­ti­za­tion and its to­tal debt was US$161 mil­lion.

Fitch says the com­pa­ny's US$47 mil­lion in cash ad­e­quate­ly cov­ers US$29 mil­lion on short-term debt as of the third-quar­ter 2016.

Ce­mex pre­vi­ous­ly made two bids to take over TCL in 2002 BUT both of­fers were re­ject­ed by then CEO Dr Rollin Bertrand.