Valdeen Shears Nep­tune

The sole in­vestor to have ex­pressed an in­ter­est in pur­chas­ing the now de­funct Arcelor­Mit­tal steel plant at Point Lisas may be on the verge of pulling out.

In March, man­age­ment shut­tered the plant, as steel ty­coon Lak­sh­mi Mit­tal an­nounced a pull­out and sent home more than 600 work­ers.

The prospec­tive buy­ers are be­ing rep­re­sent­ed by an en­ti­ty called New Era Busi­ness Ser­vices. They told the T&T Guardian that they were will­ing to spend as much as $100 mil­lion in ac­quir­ing the fa­cil­i­ty.

In an in­ter­view with the T&T Guardian, the rep­re­sen­ta­tive dis­closed that the firm is based in Char­lieville, Cha­gaua­nas, while "the in­vestors are re­gion­al, with an in­ter­na­tion­al reach."

Even as their iden­ti­ty re­mains un­known, they have main­tained their in­ter­est and rap­port with the Steel Work­ers Union of Trinidad and To­ba­go (SWUTT) since the start of the Arcelor­Mit­tal fall­out.

How­ev­er, the rep­re­sen­ta­tive said some as­pects of the on­go­ing liq­ui­da­tion process were giv­ing them sec­ond thoughts.

"We and the union were as­sured that the plant would be sold as a whole en­ti­ty and not stripped. But now we are see­ing where prop­er­ties are be­ing placed on the pub­lic mar­ket for sale. It rais­es ques­tions about the in­tegri­ty of the en­tire process," stat­ed the rep­re­sen­ta­tive.

This in­cludes, so far, the Good­wood Park house in which Mit­tal lived when in the coun­try, along with two oth­er ex­ec­u­tive res­i­den­tial hous­es owned by the com­pa­ny, as well as a cor­po­rate box at the Queen's Park Oval.

When asked if they would con­sid­er bid­ding on these prop­er­ties, the spokesper­son stat­ed that the in­vestors had in­di­cat­ed from the start that they would on­ly ten­der for a com­plete pack­age.

"The in­vestors are not pre­pared to take part in any part pack­ag­ing. It was al­ways un­der­stood to be a pack­aged deal. Is this not strip­ping the com­pa­ny?" he queried.

Liq­uida­tor Christo­pher Kelshall, in a tele­phone in­ter­view, re­spond­ed by stat­ing that while the prop­er­ties were all list­ed in the au­di­tor's re­port as com­pa­ny as­sets, he had a du­ty to the own­ers (Mit­tal) to look af­ter the sale of sur­plus as­sets.

"Any in­vestor would get a com­plete­ly func­tion­ing plant. In due course they will be in­vit­ed to ex­press in­ter­est, and get a pack­age to bid on," stat­ed Kelshall.

He main­tained, though, that the prop­er­ties were un­oc­cu­pied.

Mar­ket con­di­tions un­changed

The Mit­tal fam­i­ly bailed out of Trinidad and To­ba­go in the face of a deep slump in glob­al steel prices, caused by over­sup­ply from Chi­na. Mar­ket con­di­tions are the same for the po­ten­tial new in­vestor as they were for the pre­vi­ous own­ers. How can they make it work?

"We did our fea­si­bil­i­ty study and Mit­tal did not tap in­to the Caribbean mar­ket, those for di­ver­si­fied steel, spe­cialised high-end and by-prod­ucts," the rep­re­sen­ta­tive stat­ed.

"This is one of the rea­sons we are not daunt­ed by the pro­duc­tion of cheap steel by the Chi­nese," he added.

The greater in­cen­tive, though, is the DR-3 ma­chine lo­cat­ed on the site, which sup­ports the pro­duc­tion of spe­cialised steel and by-prod­ucts.

The ma­chine is the on­ly one of its kind in the West­ern hemi­sphere and en­sures the vi­a­bil­i­ty of the plant to com­pete eas­i­ly in the steel mar­ket.

Ru­mours the ma­chine may be shipped back over­seas have raised a red flag for the in­vestors, said their rep­re­sen­ta­tive.

"What that ma­chine can do is be­yond what any com­pe­ti­tion can do on this side of the world. We hope it is not stripped and sent back to its par­ent com­pa­ny," he stat­ed.

They are even con­sid­er­ing ac­quir­ing the re­cent­ly de­funct Cen­trin Plant, where over 200 work­ers lost their jobs. That plant de­pend­ed heav­i­ly on by-prod­ucts from the Point Lisas steel plant for its sus­tain­abil­i­ty.

The in­vestors, he said, may take their busi­ness and monies to neigh­bour­ing Suri­name or Guyana.

That aside, if all goes well, the in­vestors in­tend to set up shop with­in months of pur­chas­ing, with a cou­ple months to purge the plant and a fur­ther three months' in­cu­ba­tion pe­ri­od, then mov­ing to full op­er­a­tional stan­dards.

As for its work­force, the busi­ness con­sul­tant said, the in­vestors main­tained a rap­port with the union to en­sure they would have the nec­es­sary hu­man re­sources.

They are al­so pre­pared to en­gage in re-ed­u­cat­ing and re­de­ploy­ing where nec­es­sary, he said.

He not­ed that one of Mit­tal's biggest dis­ad­van­tages, which had forced him to close shop here and in oth­er coun­tries, was the cost of labour.

How­ev­er, the in­vestors are pre­pared to of­fer work­ers what he de­scribed as "rea­son­able" salaries along with the ben­e­fits of prof­it shar­ing and stock op­tions.

"They will now be part of the own­er­ship of the com­pa­ny/plant," he added.

While they have an­tic­i­pat­ed fur­ther ex­pen­di­ture of up to $100 mil­lion, they are con­fi­dent that this will come from pro­ject­ed prof­its.

The rep­re­sen­ta­tive stat­ed they had no in­ten­tion of in­her­it­ing a debt, one of the con­di­tions for pur­chase that the pre­vi­ous own­ers had put to the Gov­ern­ment.

Ini­tial­ly, Gov­ern­ment had been of­fered the plant for just $1, while the plant was said to have in­curred a $1.3 bil­lion debt.

Ac­cord­ing to the in­vestor, the debt fig­ure had been re­vised and had in­creased sig­nif­i­cant­ly to the tune of $3.5 bil­lion.

The on­ly ad­van­tage to liq­ui­da­tion, he ex­plained, is that you do not in­her­it the com­pa­ny's debt. How­ev­er, the rep­re­sen­ta­tive said he is yet to sit down and dis­cuss the is­sue with any­one in Gov­ern­ment.