Bankers now see Petrotrin as very risky and have made an at­tempt to get a “Gov­ern­ment guar­an­tee” of $1.2 bil­lion with­in sev­en days to cov­er debt the com­pa­ny owes, Fi­nance Min­is­ter Colm Im­bert said last evening.

Im­bert said he had no choice but to sign the guar­an­tee, which will in­crease pub­lic debt by the same amount im­me­di­ate­ly, but not­ed this will put Gov­ern­ment un­der pres­sure if Petrotrin does not con­tin­ue its re­struc­tur­ing.

Im­bert was speak­ing at an im­promp­tu me­dia con­fer­ence in the Par­lia­ment hours af­ter the In­dus­tri­al Court grant­ed an in­junc­tion to the Oil­fields Work­ers’ Trade Union (OW­TU) pre­vent­ing Petrotirn from ter­mi­nat­ing work­ers.

In ex­plain­ing a Gov­ern­ment guar­an­tee, Im­bert said it is when bankers don’t think a com­pa­ny can pay its debt.

“That is so in de­fault they can come to the Gov­ern­ment to get the mon­ey. If we do not sign it they will ask Petrotrin to pay in cash im­me­di­ate­ly,” he said.

Im­bert said in a let­ter is­sued by three bankers and re­ceived by his min­istry’s Per­ma­nent Sec­re­tary, they were in­formed that Petrotrin had three fi­nanc­ing fa­cil­i­ties which need to be re­fi­nanced or rolled over on or be­fore Oc­to­ber 15 in the sums of US$100 mil­lion, US$50 mil­lion and US$22.2 mil­lion—which was equiv­a­lent to TT$1.2 bil­lion.

“At this point in time, bankers don’t see Petrotrin mak­ing its pay­ments un­less some­thing is done to re­duce loss-mak­ing ar­eas in the com­pa­ny. Un­til that is done they will con­tin­ue to come to the Gov­ern­ment for guar­an­tees,” Im­bert said.

He said if he did not sign the Gov­ern­ment guar­an­tee this time the com­pa­ny would im­plode or col­lapse, as it will not be able to pay its bills and “es­sen­tial­ly not be able to con­tin­ue.”

Im­bert al­so said re­cent­ly there was a car­go of crude oil that had to be dis­charged to run the re­fin­ery and that car­go re­quired US$56 mil­lion (TT$400m). He added that the last ship­ment of crude oil was on Oc­to­ber 5 and the com­pa­ny could not con­tin­ue to pur­chase crude oil.

“It is sim­ple…they do not have the abil­i­ty to do that any­more.”

He read the last line of the let­ter, which he de­scribed as “in­struc­tive.”

“Please be ad­vised that Petrotrin is cur­rent­ly fac­ing se­vere liq­uid­i­ty con­straints. As lenders con­tin­ue to de­mand guar­an­tees and traders de­mand let­ters of cred­it be­fore car­goes can be dis­charged, as we nav­i­gate these chal­lenges and forge for­ward, un­fore­seen events still serve as im­ped­i­ments to pre­serv­ing cash. In this re­gard, Petrotrin may seek as­sis­tance from the min­istry for ad­di­tion­al guar­an­tees but these re­quests can on­ly be com­mu­ni­cat­ed as events un­fold.”

Im­bert said should they get an­oth­er let­ter re­quest­ing a Gov­ern­ment guar­an­tee it will be a mat­ter for the Cab­i­net to dis­cuss and de­cide on the way for­ward and they may al­so seek to con­sult with the pop­u­la­tion.

“The com­pa­ny can­not sur­vive with­out Gov­ern­ment guar­an­tees and they will no longer be im­port­ing oil for the re­fin­ery so that it will in­evitably stop pro­duc­ing gaso­line and diesel be­cause there will be no raw ma­te­r­i­al to feed the re­fin­ery to pro­duce these re­fined prod­ucts,” Im­bert said.

In seek­ing to ad­dress the In­dus­tri­al Court’s grant­i­ng of the in­junc­tion to the OW­TU, Im­bert said he hopes the court “will deal with this quick­ly be­cause we need clar­i­ty on the way for­ward.”

“If the com­pa­ny is not al­lowed to pro­ceed with its re­struc­tur­ing and shed its loss-mak­ing en­ti­ty, then this is what is go­ing to hap­pen…we will be forced to give more and more Gov­ern­ment guar­an­tees which will de­stroy our cred­it rat­ing. It will af­fect the en­tire coun­try as a whole,” he said.