Joshua Seemu­n­gal

Se­nior Re­porter

joshua.seemu­n­gal@guardian.co.tt

Op­po­si­tion Sen­a­tor Anil Roberts is call­ing on the board of Re­pub­lic Bank Lim­it­ed to jus­ti­fy what he claimed was its de­ci­sion to loan Ni­Quan En­er­gy Trinidad Lim­it­ed US$120 mil­lion.

At the Op­po­si­tion’s week­ly me­dia brief­ing yes­ter­day, Roberts claimed that cit­i­zens—with the Gov­ern­ment hold­ing a 33 per cent share in Re­pub­lic Bank share­hold­ers—may have to cov­er the loss­es as­so­ci­at­ed with the loan as Ni­Quan is now ‘strug­gling and in a cri­sis.’

“US$120 mil­lion, which is now flushed down the toi­let and who is go­ing to have to pay that back? Whose in­ter­est rates and whose fees have to go up? Yours. Whose share price is un­der pres­sure from this bad de­ci­sion to loan this PNM night­mare, Ni­Quan, Ni­Quan—US$120 mil­lion, Re­pub­lic Bank mem­bers, Re­pub­lic Bank’s board has to an­swer to you the share­hold­ers on how they qual­i­fy, what was the col­lat­er­al that al­lowed them to get a US$120 mil­lion loan?” Roberts asked.

“Ains­ley Gill has said and he’s beg­ging, if we don’t get any mon­ey now, we are go­ing to have to send home 70 work­ers. You can’t get mon­ey be­cause Cari­CRIS just down­grad­ed Ni­Quan to say don’t lend them any mon­ey, they have no rev­enue stream what­so­ev­er. They don’t pro­duce a drop of diesel. They have no sales to be made. …Ni­Quan is un­der pres­sure. It is a to­tal col­lapse.”

He added, “I am ask­ing the board of di­rec­tors of Re­pub­lic Bank…What are you go­ing to take? The as­set that can’t make any­thing? That is blow­ing up and not pro­duc­ing? That was on­ly val­ued at US$35 mil­lion any­way? Even if it is pris­tine, you are still short US$85 mil­lion. Who is go­ing to pay for that? What is go­ing to hap­pen to the share price of Re­pub­lic Bank? Whose heads will roll? Who is re­spon­si­ble for that? How were they able to get that loan?”

In Sep­tem­ber, Guardian Me­dia re­port­ed that Ni­Quan En­er­gy had gone of­fline be­cause it had nei­ther nat­ur­al gas nor per­mis­sion to run it.

On Au­gust 14, the Gov­ern­ment, through the Trinidad and To­ba­go Up­stream Down­stream En­er­gy Op­er­a­tions Com­pa­ny Lim­it­ed (TTUDEO­CL), ter­mi­nat­ed its con­tract with the com­pa­ny over sums owed to it. On Au­gust 21, Jus­tice Kevin Ram­cha­ran de­nied Ni­Quan an in­junc­tion to com­pel the State to sup­ply nat­ur­al gas to the plant.

Ni­Quan owes hun­dreds of mil­lions to fi­nanciers in T&T—among them banks, cred­it unions, and in­vest­ment com­pa­nies. Even the Gov­ern­ment, through Petrotrin, has pref­er­ence shares in Ni­Quan. Last week, em­ploy­ees told the Sun­day Guardian that they had been fur­loughed un­til No­vem­ber and had not been paid their Au­gust and Sep­tem­ber salaries and are con­cerned whether they will be paid for Oc­to­ber.

In com­mu­ni­ca­tion with in­vestors re­cent­ly, Ni­Quan founder and chief vi­sion­ary of­fi­cer Ains­ley Gill said the GTL plant had been placed “in­to an as­set pre­serv­ing ‘silent mode.’”

Mean­while, Sen­a­tor Dami­an Ly­der said it could be a dark and drea­ry Christ­mas for many busi­ness­es and, in turn, em­ploy­ees, as the coun­try’s for­eign ex­change cri­sis was be­ing ex­ac­er­bat­ed by the Gov­ern­ment’s ac­tions.

He said with a de­cline in gas pro­duc­tion and is­sues sur­round­ing VAT re­funds, there was a per­fect storm for a for­eign ex­change cri­sis.

He claimed the Gov­ern­ment’s de­ci­sion to start to pay out $3 bil­lion in bonds for VAT re­funds from May had ef­fec­tive­ly re­duced the avail­abil­i­ty of for­eign ex­change in the banks.

“More than 70 per cent of that (the bonds) is to be paid out to the en­er­gy com­pa­nies. This means these en­er­gy com­pa­nies will have some­where around $2.1 bil­lion—around May or June or some­where around there. This means these com­pa­nies re­ceive a wash of TT dol­lars and giv­en that these en­er­gy com­pa­nies would nor­mal­ly have to con­vert their US dol­lar re­serves, the rev­enues that they get to TT dol­lars to pay for their lo­cal ex­pen­di­ture—rent, em­ploy­ees, man­u­fac­tur­ing—they no longer have to con­vert in­to US dol­lars be­cause they are awash with TT dol­lars. So you are re­mov­ing a sig­nif­i­cant amount of US dol­lars from the com­mer­cial banks, all in one shot,” he said.

“The cri­sis is that you’ve re­moved these US dol­lars from the sys­tem for what would be al­most a 6-8 month pe­ri­od for rev­enues com­ing in from these rev­enues…This po­ten­tial­ly means that en­er­gy com­pa­nies have 6-8 months of TT cov­er when it comes to pay­ing their op­er­a­tional ex­pen­di­ture in this coun­try. There­fore, we could see this cri­sis go­ing all the way to De­cem­ber…from May to De­cem­ber. An al­ready ex­ist­ing for­eign ex­change cri­sis will be ex­ac­er­bat­ed for the up­com­ing months.”

Ac­cord­ing to Ly­der, small, medi­um and mi­cro busi­ness­es will suf­fer the most as a con­se­quence. He said, af­ter all, it was own­ers of those types of busi­ness­es who were strug­gling to get US dol­lars to pur­chase re­tail prod­ucts to sell. He be­lieves the Gov­ern­ment should have an­tic­i­pat­ed the im­pact of the bonds and re­leased more USD to banks from the Cen­tral Bank.

He al­so called on the Gov­ern­ment to state how much mon­ey was owed to busi­ness­es in VAT re­funds and urged the Fi­nance Min­is­ter to pay the re­funds as soon as pos­si­ble.