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TRINIDAD CEMENT LIMITED
SECTION 7: THE RESTRUCTURING PLAN
7.1
THE RESTRUCTURING PLAN OVERVIEW
On 29 September 2014, the TCL Board met with its creditors and informed them that the Company was not
in a position to make the principal and interest payment that was due on 30 September 2014. Following this
meeting, the Company met with its lenders who were represented by a Steering Committee of the largest
lenders (SC) to negotiate a restructuring plan for the Company’s debt. Simultaneously, the Board engaged
in discussions with the OWTU with respect to their Court awards for the period 2009-2011 and to settle
outstanding negotiations for the period 2012-2014. In mid-December 2014, a MOU was signed between
TCL and the OWTU, which outlined the agreements between the parties as follows:
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partial forgiveness in respect of the total amount due to employees;
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limit employee liabilities up to December 2014 at a calculated amount of TT$ 150M;
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to receive a portion of outstanding payments in cash prior to December 2014; and
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the deferral of the balance which is to be settled during 2015 both in and through the issue of TCL
shares.
In late December 2014, the Board and the SC reached an agreement in principle on a restructuring plan,
including the following areas:
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the reduction of interest rates;
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forgiveness of the default moratorium interest from 30 September 2014;
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adjustment of principal payments in line with the Company’s revised cash flow projections;
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an increase in capex limits; and
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the ability to prepay with a discount if paid within 90 days after completion of the Rights Issue.
The preconditions to effect the creditors’ agreement included the removal of the 20% ownership limit and
the contribution of at least US$50M of new equity by TCL shareholders. In addition to the above, the
lenders’ amendments must be effective by 30 April 2015 (with provision for an extension of 30 days at the
option of a majority of the creditors).
In order to ensure a successful Rights Issue, the Board agreed that it would be beneficial to have a
“backstop shareholder”. Sierra Trading as a backstop shareholder has agreed to:
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participate in the Rights Issue to the fullest extent permitted by its shareholding (20%);
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commit additional capital; up to a maximum total participation of US$45M in order to ensure that TCL
raises at least the TT$ equivalent of US$50M through the Rights Issue.
In consideration of the backstop position, the Board has agreed to grant an exclusive right to Sierra Trading
to subscribe and purchase any shares in the Rights Issue which are not taken up by Eligible Shareholders,
up to an amount that, when combined with Sierra Trading’s existing shareholding in the Company, will not
exceed 40% of TCL's outstanding shares. Additionally, if Sierra Trading has not achieved a shareholding in
TCL of at least 35% through the purchase of shares in the Rights issue, then, subject to receiving all
required approvals, including shareholder approval, the Board has agreed to issue a private placement of
TCL shares in favour of Sierra Trading. It should be noted that for the latter scenario, the amount of the
share issue will be an amount that will permit Sierra Trading to achieve a shareholding of 35% of TCL's
outstanding shares.
