The president of the Bankers Association, Dennis Evans, is confident that Trinidad Cement Ltd will get support from members of his association to restructure it $1.7 billion debt, "as long as the company presents a credible plan to restructure its debt." "TCL is a long standing strong company and it will rebound. I am sure that the banks will support the restructuring efforts as long as there is a credible plan in place." His comments follow the announcement by the Central Bank Governor Ewart Williams that there was an 18 per cent decline in the sale of cement and were made mere weeks after the company indicated that it could not pay its previous debt as scheduled and needed to restructure it. Evans acknowledge that the company had asked its creditors to restructure its debt because of the significant fall in sales it was experiencing, not just in T&T but throughout the wider Caribbean. "We are waiting on them to come with the plan and we expect them to do so in the not-too-distant future. "I think all of those who bankroll TCL know the nature of their business and know that it is cyclical. In a sense it is no different from the methanol business with its ups and downs. So we understand these things and we will be sympathetic to the company."
Asked if TCL had defaulted on its debt by virtue of its inability to pay its creditors on time, Evans said he did not wish to put it in that way. "It is true that they were unable to pay their creditors in the timeframe promised but I would say they asked to restructure the debt." TCL recently told the Business Guardian that it had not defaulted on any loan, saying it sought a moratorium on the repayment so that the restructuring can occur and that it was not in default. The company also denied that some of its creditors were unwilling to take more paper from the company. The company acknowledged that any restructuring will eventually cost TCL more and increase its overall debt position but said this was in the best interest of TCL. TCL's communications manager, Michelle Langton, in an e-mail response said: "The cost of borrowing will reflect slightly higher costs, but this has to be compared with the relief which will be provided in the short to medium term. TCL will be a stronger company coming out of this exercise and will therefore be more attractive to investors."
TCL has been badly hurt by the fallout from the financial crisis which hurt tourist travel and investments around the Caribbean. In its third quarter report, TCL noted that notwithstanding lower demand levels, its T&T businesses remained profitable. Heavy losses were, however, incurred by the Jamaican and Barbadian subsidiaries due to continued depressed market conditions. Those two markets declined by a further 17 per cent and 20 per cent respectively in 2010. The company told shareholders: "Caribbean economies remain challenged even though the economic recovery in North America and Europe seems to have started. As a result of the low sales, the kiln in Jamaica was taken out of service for 40 days in order to monetise high inventories and the Barbados plant is undertaking a similar shutdown in Q4. These lower plant utilisation rates resulted in expected heavy losses due to the high proportion of fixed costs that are incurred at each plant."
On Tuesday, the Governor of the Central Bank said, while he did not want to speak specifically about any one company, it was clear that any company in the construction sector would be under tremendous pressure. Evans said the good thing is that whenever there is an uptake in the economy, the first companies to come out of it are those in construction and he expected TCL to benefit as soon as projects get going in the region.