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RINIDAD CEMENT LIMITED
SECTION 8: RISK FACTORS
Prior to deciding whether to apply for New Shares under the Rights Issue, Eligible Shareholders should read the
Information Memorandum in its entirely in order to gain an appreciation of the Company, its activities, operations,
financial position and prospects.
An investment in New Shares should be considered speculative. New Shares carry no guarantee with respect to the
payment of any dividends, returns on capital or the market value of those New Shares.
The risks included in this Section are the key risks identified by the Board as being specific to the Company and its
operations as at the date of this Information Memorandum and reasonably anticipated by the Board. It is important
to note that, although every effort has been made to provide a comprehensive description of the relevant risk, the
risks listed in this Section are not an exhaustive list of the risks relevant to the Company. The risks discussed below
also include forward-looking statements from which the Company’s actual results may differ substantially. See
cautionary statement regarding “Forward-Looking Statements” on page 10.
8.1
GENERAL INVESTMENT RISKS
Going concern considerations
On 29 September 2014, the Company suspended its principal debt repayments due under the Override
Agreement. This had the effect of creating a condition of default which rendered all outstanding debt
covered by this agreement immediately due, resulting in the reclassification of all long term debt to current
liabilities. As a result, $1.8 billion in outstanding debt obligations was classified as a current liability.
Hence the Group has a net working capital deficit of $1.5 billion as at 31 December 2014. The continued
agreement of the Company’s lenders to negotiate the restructuring plan with the Board is contingent on the
Rights Issue, and in particular, the backstop underwriting commitment in the amount of US $45M provided
by Sierra Holdings.
Changes in legislation and government regulation
Government legislation, including changes to the import regulations (such as the removal of the Common
External Tariff on cement) as well as the taxation system, may affect future earnings and the relative
attractiveness of investing in the Company.
Regional and Global Economic conditions
Economic conditions, both regional and global, may affect the performance of the Company. The
Company’s future possible revenue and share price can be affected by these conditions all of which are
beyond the control of the Company and the Directors. In addition, the Company’s ability to raise additional
capital, should it be required, may be affected.
The Company’s business is confined to a particular geographic region
The Company’s results of operations are highly dependent on the results of TCL and its operating
subsidiaries located in the CARICOM region. Adverse changes in the economies of one or more of the
nations located in such region (or in the economies of other major nations throughout the world) could have
a material adverse effect on the business, financial position, results of operations, liquidity and cash flows
of the Company.
