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Wednesday, February 19, 2025

Is Proman GORTT’s new BFF?

by

Anthony Wilson
391 days ago
20240125

About one-month ago, on De­cem­ber 27, 2023, I wrote a news sto­ry in the T&T Guardian, which was head­lined Govt to sell MHIL shares to Pro­man, in which it was re­port­ed that a de­ci­sion had been tak­en to sell Cli­co’s 56.53 per cent share­hold­ing in a com­pa­ny called Methanol Hold­ings In­ter­na­tion­al Ltd to petro­chem­i­cal gi­ant, Pro­man, for the sum of US$347 mil­lion.

MHIL was in­cor­po­rat­ed in Ju­ly 2004 in St Kitts and Nevis with its reg­is­tered of­fice be­ing the law of­fices of Gon­salves & Hamel-Smith. MHIL has owned 60 per cent of the Oman Methanol Com­pa­ny since Au­gust 12, 2008, ac­cord­ing to Cli­co’s 2022 fi­nan­cial state­ment.

The oth­er share­hold­er in MHIL, with 43.47 per cent, was Con­sol­i­dat­ed En­er­gy Ltd, a com­pa­ny that is owned, ei­ther in whole or in part, by Pro­man.

The sub­text of the De­cem­ber 27 ar­ti­cle is that if MHIL owns 60 per cent of the Oman Methanol Com­pa­ny, and Pro­man owns 100 per cent of MHIL, then Pro­man would be the ma­jor­i­ty share­hold­er in MHIL with 60 per cent.

Two things hap­pened this week that have pro­gressed that sto­ry, which was il­lus­trat­ed with a pho­to­graph of Prime Min­is­ter Dr Kei­th Row­ley shak­ing hands with Pro­man CEO David Cas­sidy at the start of a vis­it to the Switzer­land head­quar­ters of the com­pa­ny in Sep­tem­ber 2022.

The first is that Dr Row­ley had some kind very words to say about Pro­man on the first day of this week’s 2024 Trinidad and To­ba­go En­er­gy Con­fer­ence.

Re­spond­ing to a ques­tion from T&T En­er­gy Cham­ber CEO, Dax Dri­ver, who men­tioned Pro­man’s role in dri­ving rev­enue, jobs and en­tre­pre­neur­ship in T&T, Dr Row­ley said:

“We are par­tic­u­lar­ly pleased with the suc­cess­es that Pro­man has made. And, in the Gov­ern­ment it­self, we have been tak­ing steps to en­sure that our peo­ple are astride of the de­vel­op­ments,” said the Prime Min­is­ter, as he went on to talk about the 35 grad­u­ates of “some of the best uni­ver­si­ties in the world” who were brought in­to the Min­istry of En­er­gy in 2018.

“Pro­man’s agree­ment to do more in Trinidad and To­ba­go: to cre­ate, to in­no­vate, to es­tab­lish and to pi­o­neer in go­ing af­ter projects like small-pool gas, which De No­vo En­er­gy (a Pro­man sub­sidiary) has done; tak­ing de­ci­sions to have new-build ships us­ing methanol in their fleet and show­ing the world that ships can, in fact, change. And, of course, tak­ing steps to take us to a point where the world-trad­ing de­ci­sion mak­ers would know that their ves­sels can be re­fu­eled in Trinidad and To­ba­go with clean fu­el (methanol), es­pe­cial­ly as we move to­wards the green­ing of the prod­ucts at the Point Lisas In­dus­tri­al Es­tate.

“These are the de­ci­sions that will give us ac­cess, not on­ly to mar­kets, but to bet­ter mar­kets. And the col­lab­o­ra­tion that we heard about this morn­ing, can go all the way down, but usu­al­ly starts with the un­der­stand­ing that we are all in this thing to­geth­er.”

Af­ter the ques­tion and ses­sion with Dr Dri­ver, T&T’s Prime Min­is­ter stopped by the Pro­man booth, which was lo­cat­ed in the hall­way out­side the Hy­att con­fer­ence cen­tre, and chat­ted with some of the com­pa­ny’s peo­ple, in­clud­ing for­mer Cen­tral Bank Gov­er­nor Dr Eu­ric Bobb and for­mer gov­ern­ment sen­a­tor and min­is­ter, Car­los John.

Ques­tions:

• What is the na­ture of Pro­man’s “agree­ment to do more in Trinidad and To­ba­go,” and is this agree­ment a for­mal doc­u­ment that can be made pub­lic or is it a ver­bal com­mit­ment by the Swiss com­pa­ny to use its best ef­forts to do more in T&T in the fu­ture?;

• At the re­nam­ing cer­e­mo­ny for a Pro­man methanol-fu­eled ship at the Hy­att on No­vem­ber 23, 2022, Prime Min­is­ter Row­ley spoke about the cre­ation of a bunker­ing in­dus­try in T&T for ships that use methanol.

What steps has the Gov­ern­ment tak­en to progress the as­pi­ra­tion to make T&T a cen­tre of methanol fu­el bunker­ing?

Sell­ing MHIL shares

The sec­ond in­ter­est­ing de­vel­op­ment is that Min­is­ter of Fi­nance, Colm Im­bert, (who is Cor­po­ra­tion Sole) con­firmed the De­cem­ber 27, 2023 Guardian ar­ti­cle that Cli­co’s block of 56.53 per cent of MHIL was sold to Pro­man.

In a mo­tion on the ad­journ­ment of Tues­day’s sit­ting of the Sen­ate, Mr Im­bert clar­i­fied that the de­ci­sion to sell the block of shares to Pro­man was tak­en by the share­hold­ers of the in­sur­ance com­pa­ny: the liq­uida­tors of CL Fi­nan­cial, which is the par­ent com­pa­ny of Cli­co, own­ing about 51 per cent of the com­pa­ny, and the Gov­ern­ment, the own­er of 49 per cent of the in­sur­er.

“The liq­uida­tor could have sold them (the MHIL shares) with­out the Gov­ern­ment’s con­sent, but there is a re­la­tion­ship of re­spect be­tween the liq­uida­tor and the Gov­ern­ment with re­spect to im­por­tant de­ci­sions.

“It is the busi­ness of the liq­uida­tor to try and re­cov­er the $30 bil­lion that the Gov­ern­ment has put in­to the bailout of CL Fi­nan­cial...It is the job of the liq­uida­tor to liq­ui­date the as­sets if CL Fi­nan­cial, which in­clude the 51 per cent of Cli­co to re­pay that $30 bil­lion the Gov­ern­ment is owed...”

Mr Im­bert went on to re­fer to a clause in the agree­ment that es­tab­lished MHIL, which stip­u­lat­ed that if ei­ther Cli­co or Con­sol­i­dat­ed En­er­gy were sell­ing their shares in MHIL, those shares had to be of­fered to the oth­er par­ty.

“It is a typ­i­cal com­mer­cial clause where if the shares are to be sold, they have to be first of­fered to the oth­er share­hold­ers and if that share­hold­er re­fus­es, then the shares can be sold on the open mar­ket...

“On all pre­vi­ous oc­ca­sions when Cli­co of­fered the shares to Con­sol­i­dat­ed En­er­gy, at an in­de­pen­dent val­u­a­tion price...in ac­cor­dance with the share­hold­ers’ agree­ment, Con­sol­i­dat­ed En­er­gy de­clined to pay the price. So whether it was US$300 or US$350 mil­lion...Con­sol­i­dat­ed En­er­gy said no we can­not pay that price.”

Mr Im­bert said af­ter the shares were of­fered for sale “a month has to elapse, and then Con­sol­i­dat­ed En­er­gy would say yes we are buy­ing the shares at the val­u­a­tion price or no we are not. On every oc­ca­sion, they said no.”

He said there was an­oth­er “unique” el­e­ment of the share­hold­ers’ agree­ment that kicked in, which was that the MHIL shares could not be sold to a com­peti­tor of MHIL (pre­sum­ably a methanol com­pa­ny).

The Min­is­ter of Fi­nance con­firmed that there were three at­tempts by Cli­co to of­fer the shares to Con­sol­i­dat­ed En­er­gy.

“On the last oc­ca­sion af­ter mul­ti­ple le­gal opin­ions were re­ceived, an opin­ion was ren­dered that you could try to sell them to the Gov­ern­ment and the NIF (the Na­tion­al In­vest­ment Fund). As soon as that was done, the lawyers for Con­sol­i­dat­ed En­er­gy im­me­di­ate­ly sent pre-ac­tion pro­to­col let­ters to the Gov­ern­ment out­lin­ing that if it tried to com­plete the trans­ac­tion, they would go to court and ask for an in­junc­tive re­lief...

“Some­time be­tween Sep­tem­ber and No­vem­ber last year, Con­sol­i­dat­ed En­er­gy said we are now ready to buy the shares at the val­u­a­tion price, which is what they had re­fused to do for 12 years.

“As a re­sult, the share­hold­ers’ agree­ment kicked in and they have paid $2.4 bil­lion (US$347 mil­lion) for the shares. That’s it.”

Ques­tions:

• If Con­sol­i­dat­ed En­er­gy re­fused Cli­co’s of­fer at the end of 2022, on what le­gal ba­sis can they come nine to 11 months lat­er and say they are now ready to buy the shares?

• If the Gov­ern­ment re­ceived “mul­ti­ple” le­gal opin­ions that Cli­co could sell the MHIL shares to Cor­po­ra­tion Sole and NIF, why didn’t Mr Im­bert in­struct his at­tor­neys to fight the mat­ter, in­stead ac­qui­esc­ing to Pro­man’s in­junc­tion threat?

• Why would the Gov­ern­ment’s pro­pos­al that Cli­co sell the shares to Cor­po­ra­tion Sole and NIF trig­ger a pre-ac­tion pro­to­col let­ter, if nei­ther is a com­peti­tor of MHIL?


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