Asha Javeed

Lead Ed­i­tor In­ves­ti­ga­tions

asha.javeed@guardian.co.tt

Ni­Quan, the trou­bled gas-to-liq­uids firm which went of­fline in Sep­tem­ber 2023 as a re­sult of le­gal, fi­nan­cial and tech­ni­cal is­sues, has dis­con­tin­ued its le­gal pro­ceed­ings against the State.

The com­pa­ny filed no­tice to dis­con­tin­ue mat­ters against the State last month but no rea­sons were giv­en.

Ni­Quan has ap­pealed Jus­tice Kevin Ram­cha­ran’s Au­gust 21 de­ci­sion which de­nied the com­pa­ny an in­junc­tion to com­pel the State to sup­ply nat­ur­al gas to the plant.

The no­tice of dis­con­tin­u­ance is at vari­ance with cor­re­spon­dence, shared to the com­pa­ny’s fi­nanciers, that it would seek all reme­dies from the State.

In an up­date to em­ploy­ees though an email, Ni­Quan founder and chief vi­sion­ary of­fi­cer Ains­ley Gill ex­plained that the com­pa­ny has been en­gaged in me­di­a­tion with Trinidad and To­ba­go Up­stream Down­stream En­er­gy Op­er­a­tions Com­pa­ny Lim­it­ed (TTUDEO­CL) with Lord Neu­berg­er of Abotts­bury, (for­mer pres­i­dent of the Supreme Court in Eng­land) as the me­di­a­tor.

Gill said the me­di­a­tor de­liv­ered an ear­ly non-bind­ing “Ear­ly Neu­tral Eval­u­a­tion” on Jan­u­ary 20 which said the gas sup­ply con­tract had not been ter­mi­nat­ed and TTUDEO­CL had an oblig­a­tion to to sup­ply gas in ac­cor­dance with that con­tract.

He not­ed that in ab­sence of a gas sup­ply con­tract and to pro­tect Ni­Quan’s in­ter­ests, the com­pa­ny will “be pur­su­ing all its le­gal reme­dies for sub­stan­tial dam­ages from TTUDEO­CL and the Gov­ern­ment of the Re­pub­lic of Trinidad and To­ba­go.”

“This course of ac­tion is sup­port­ed by our lead fi­nan­cial arranger and note­hold­ers and in the in­ter­im we have their sup­port to con­tin­ue the sta­tus quo in­clud­ing preser­va­tion of the plant in silent mode,” he said.

To this end, Gill said the em­ploy­ees would be fur­loughed for a fur­ther three months un­til April 30.

The com­pa­ny has been cash- strapped since it went of­fline and found it­self in de­fault of its US$150,000,000 mil­lion fa­cil­i­ty last De­cem­ber.

Since the com­pa­ny went off line, Ni­Quan has on­ly paid two salaries to its 70 em­ploy­ees for Au­gust and Sep­tem­ber 2023.

While its fi­nanciers are rais­ing mon­ey for the com­pa­ny, it has giv­en in­struc­tions that it was not for salaries.

Hun­dreds of mil­lions are owed to lenders in­clud­ing some of coun­try’s top banks and cred­it unions.

Last week, Patrick El­lis, the group chief fi­nan­cial of­fi­cer of JMMB Group Ltd, re­vealed the full ex­tent of the com­pa­ny’s ex­po­sure to Ni­Quan when he de­liv­ered the com­pa­ny’s unau­dit­ed fi­nan­cial re­sults for the nine months end­ed De­cem­ber 31, 2023, at an in­vestor brief­ing.

“In terms of our ex­po­sure to Ni­Quan, our prin­ci­pal debt that we have is ap­prox­i­mate­ly $65 mil­lion, just prin­ci­pal. The ex­po­sure it­self, if you look at the to­tal ex­po­sure, it is about $175 to $200 mil­lion. The last val­u­a­tion that we had in­ter­nal­ly was about $400 mil­lion, which was the last one that was done. So if you look at a debt to val­ue ex­po­sure it is less than 50 per cent in terms of the over­all debt.

“And I know the strat­e­gy that is be­ing pur­sued is one of op­er­a­tion, which it has been proven; the plant has pro­duced. So, we are very con­fi­dent in terms of the out­come and look­ing for­ward to its con­clu­sion,” he said.

In de­fault

On No­vem­ber 7, Ni­Quan’s fa­cil­i­ty agent, Re­pub­lic Bank Lim­it­ed (RBL), along with oth­er note­hold­ers passed a res­o­lu­tion to ap­point a steer­ing com­mit­tee among note­hold­ers to es­tab­lish a plan for the now de­funct plant mov­ing for­ward.

RBL’s ex­po­sure to Ni­Quan is about US$22 mil­lion.

The plant was used as col­lat­er­al when the com­pa­ny sought to raise mon­ey over the years to make it op­er­a­tional.

As fa­cil­i­ty agent, giv­en that Ni­Quan has now de­fault­ed on its two fi­nanc­ing in­stru­ments - a short-term note in­stru­ment and a mort­gage deben­ture, dat­ed 27 au­gust 2021, which is US$150,000,000 se­cured mort­gage which was due by 2022 - the note­hold­ers can take what­ev­er ac­tion they deem fit for the plant mov­ing for­ward.

Last Oc­to­ber, in a press state­ment, re­gion­al rat­ing agency Cari­CRIS low­ered Ni­Quan’s cred­it rat­ing to B- which im­pact­ed its abil­i­ty to raise any short-term fund­ing. Cari­CRIS warned that it could be fur­ther low­ered if Ni­Quan does not suc­cess­ful­ly re­fi­nance it short term debt by the end of the year.

Cari­CRIS said the low­er­ing of the as­signed rat­ings re­flect Ni­Quan’s in­abil­i­ty to at­tain full com­mer­cial op­er­a­tions at the name­plate ca­pac­i­ty by Sep­tem­ber 30, 2023 (iden­ti­fied as a fac­tor that could lead to a low­er­ing of the rat­ing in their March 2023 re­port) and the ter­mi­na­tion of the gas sales con­tract by TTUDEO­CL which has be­come sub­ject to le­gal pro­ceed­ings by Ni­Quan.

Cari­CRIS said it will con­sid­er re­vis­ing its rat­ings up­ward if Ni­Quan can re­sume a long-term GSC, to­geth­er with suc­cess­ful re­fi­nanc­ing of the ex­ist­ing Short-Term Note In­stru­ments (STNI) in­to a longer-term fa­cil­i­ty.

“We may, how­ev­er, fur­ther low­er the rat­ings if the STNI is not re­fi­nanced or ex­tend­ed by De­cem­ber 31, 2023, or if any oth­er cred­it neg­a­tive events oc­cur be­fore that date,” the rat­ing agency warned.

On March 16, 2023, Cari­CRIS not­ed that if Ni­Quan was not able to achieve op­ti­mal pro­duc­tion by June 30, 2023, it would af­fect its abil­i­ty to re­fi­nance the ex­ist­ing notes or ob­tain ap­proval for a fur­ther ex­ten­sion by note­hold­ers by Ju­ly 31, 2023.

It not­ed that the in­abil­i­ty to achieve cer­ti­fi­ca­tion of full name­plate ca­pac­i­ty of 2,400 bar­rels per day “ad­verse­ly im­pact­ed the Com­pa­ny’s abil­i­ty to se­cure time­ly re­fi­nanc­ing.”

At that time, it not­ed that at De­cem­ber 2022, Ni­quan’s to­tal debt stood at US$218.7 mil­lion, a 416.6 per cent in­crease from 2018 which was pro­ject­ed to fur­ther in­crease to US$312 mil­lion by De­cem­ber 2023.

The June 15, 2023, ac­ci­dent at the plant which led to the death of 35 year-old pipe fit­ter Al­lan­lane Ramkissoon and the sub­se­quent clo­sure of the plant for in­ves­ti­ga­tions by the Oc­cu­pa­tion­al Safe­ty and Health Agency and the Min­istry of En­er­gy and En­er­gy In­dus­tries (MEEI) af­fect­ed the com­pa­ny’s abil­i­ty to re-fi­nance its debt which was set for Ju­ly 31.

On Sep­tem­ber 22, 2023 Ni­Quan’s chair­man John An­drews, in a news­pa­per ad­ver­tise­ment, asked the Gov­ern­ment to up­hold the “sanc­ti­ty of con­tract” de­spite the fact that no con­tract ex­ists be­tween the com­pa­ny and the State.