It’s not every day that I wake up cursing.
A high court judge on Friday reserved her decision on an application by the directors of Trinidad Cement Ltd (TCL) for an injunction preventing the holding of a special (compulsory) meeting of the shareholders of the cement producer, which has been scheduled for Tuesday. The judge said she would deliver her ruling on Monday at 10am, one of the attorneys involved in the case told the Sunday BG.
The shareholders called the special (compulsory) meeting, which is due to be held at the Radisson Hotel on Wrightson Road In Port-of-Spain, for the purpose of removing six of TCL’s nine directors. The shareholders propose to replace the six directors—who include the the company’s chairman Andy Bhajan and its chief executive Rollin Betrand—with seven directors.
Among the seven directors who the shareholders are proposing should be elected to serve on the TCL board are Alison Lewis, the retired permanent secretary in the Ministry of Finance and Christ Dehring, the former investment banker who is now a senior executive of Cable & Wireless. Among the shareholders who are supporting the proposed board-level changes at TCL are the National Insurance Board, the Unit Trust Corporation and Cemex, which at 20 per cent is the cement producer’s largest single shareholder.
Initially, the shareholders had the support of 54.6 per cent of TCL’s issued share capital, but in advance of Tuesday’s special (compulsory) meeting they have been able to garner the support of additional proxies, which now places their support at over 66 per cent, sources close to the shareholders revealed.
TCL’s attorneys argued in court on Friday that if the special (compulsory) meeting is allowed to proceed it would undermine and violate the injunction that was granted by a High Court judge in July 2013 that prevented the holding of the company’s annual general meeting to report on its 2012 results. In a notice posted on the website of the Stock Exchange on Friday, TCL argued that “any attempts to implement the meeting would expose the relevant parties to contempt of court.”
The TCL directors also argue that if the meeting goes on, there would be uncertainty about the validity of the election of directors at that meeting. The directors argue, as well, that the current management and board of the cement producer have been responsible for the turnaround of the company’s fortunes and they question why shareholders representing a majority stake in the company want to remove the turnaround team.
On Thursday, TCL issued its consolidated interim financial report for the six month period ending June 30, 2014, which revealed that the company’s after-tax profit had declined by 55 per cent to $32 million from $70.4 million in the first six months of 2013. TCL experienced an 8 per cent increase in its revenues for the six months to June, but its Earnings before Interest, Taxes, Depreciation and Non-recurring charge were flat and its profit before tax was also flat.
The company increased the price of its cement in the T&T market by 9 per cent in July. TCL also produces cement at facilities in Jamaica and in Barbados. According to the group’s half year report, debt service (both principal and interest) on its $2 billion debt is forecast to total $368 million in 2014, some $70 million more than the company paid in 2013. The financial report also discloses that the backpay obligation imposed on TCL by the Industrial Court for the 2009 to 2011 period amounted to $100 million.
“The group has appealed this decision in its entirety and a stay of execution was granted to October 13, 2014 when the subtsnative case will bbe heard,” said the results.
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