Asha Javeed
Lead Editor Investigations
asha.javeed@guardian.co.tt
NiQuan’s founder, chief visionary officer, and director, Ainsley Gill, has described the wind-up petition filed by former independent senator David Small as an “abuse of process”.
Even though Small, a former vice-president of the company, was awarded $20,647,017 million by the courts five months ago for breach of contract by NiQuan, to date, no money has been paid to him.
On February 1, Small, through his attorney, Anand Ramlogan, initiated a wind-up petition .
Gill, in his application on March 5 to dismiss the wind-up petition, described Small’s action as “oppressive and unfair”.
“There are other more appropriate remedies available to Mr Small to recover any indebtedness owed to him,” he said in his affidavit.
In his view, Small’s challenge to get the sum owed to him will negatively impact the company and its other creditors.
“NiQuan is likely to have meritorious grounds for claiming substantial damages against Mr Small under the tort of malicious prosecution, and that cross-claim against Mr Small is likely to extinguish Mr Small’s debt claim against NiQuan,” he said.
“I further believe that the said petition was filed by Mr Small with the collateral purposes of putting pressure upon NiQuan, particularly under the threat of the prospect of damaging publicity,” Gill argued.
In Gill’s view, Small and his attorneys should have been cognisant that NiQuan could only pay the sum in the judgment if the plant was operational.
“NiQuan’s ability to obtain certain approvals necessary for reaching commercial operations and generation of material revenues in United States dollars has been hampered by governmental bureaucracy, impacting an earlier restart of the GTL plant. This has inextricably affected NiQuan’s ability to obtain interim debt and/or equity financing, which could have been used towards the satisfaction of any amounts finally adjudged to be due and payable to Mr Small,” he said.
Gill said until legal matters between the company and the State are resolved, NiQuan will experience cash flow constraints, but the company is not insolvent.
“The bare allegation in the said petition that NiQuan is unable to pay its debts is therefore false,” he said.
In his wind-up petition, Small wrote to all the financial institutions that NiQuan does business with—Republic Bank Limited, Scotiabank Trinidad and Tobago Limited, First Citizens Bank Limited, RBC Royal Bank (Trinidad & Tobago) Limited, PECU Credit Union Cooperative Society, JMMB Group Trinidad and Tobago, Firstline Securities Limited, and the Central Finance Facility Cooperative Society—with notice of the judgment and his intention to petition to wind up the company.
“Unfortunately, there has been no response to these letters,” the petition said.
Last week, all the financial institutions, through their lawyers, sought to have a hearing on Small’s matter adjourned until their clients could make representations and be allowed to participate in the proceedings.
For his part, Gill’s defence is that while “NiQuan is experiencing cash flow difficulties, on a balance sheet analysis, its total assets exceed the value of the debt claimed by Mr Small and the aggregate value of all of its debts owed to its other creditors.”
According to Gill, the economic benefit of the damages as a contingent legal asset has been assessed by FTI Consulting, and the range of damages is, at a minimum, the costs incurred and assessed at US$476 million and upwards of US$800 million as a fair market valuation.
Small’s judgment, in September 2023, came amid financial problems plaguing the company—its debt had ballooned—and has gone offline as a result of no permission to operate from the Ministry of Energy and Energy Industries (MEEI) and no natural gas contract for the plant to continue with the project.
Creditors and Financiers
Who does NiQuan owe, and how much?
The Sunday Guardian understands that NiQuan’s reach affects almost all of the country’s financial institutions to varying degrees.
Its debt portfolio ranges from financiers to legal challenges to contractors, totalling about US$400 million.
According to documents filed in court, this is what the Sunday Guardian can determine:
1. Republic Bank is the collateral agent under a Short-Term Note Instrument (STNI) issued by NiQuan to approximately 20 noteholders from various countries. “As at the date of this letter, the STNI covers debt owed by NiQuan to the noteholders in the amount of US$175,000,000,” the bank’s letter to the court said. The Sunday Guardian understands that NiQuan’s debt to Republic is US$22 million.
2. According to legal letters, these companies are owed substantial sums: The Junior Sammy Group; Firstline Securities Limited; Central Finance Facility (CFF); PECU Credit Union; JMMB; Teachers Credit Union; and Waterloo Capital Advisors Limited. The sums were not disclosed, but their lawyers have made submissions to have the wind-up petition halted.
3. Sunday Guardian understands that First Citizens and Guardian Asset Management also face exposure to millions of dollars.
4. Massy Energy is also financially exposed to over $100 million.
5. JMMB’s investment is significant. Last month, 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, 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 has been proven; the plant has produced. So, we are very confident in terms of the outcome and looking forward to its conclusion,” he had said.
On November 7, 2023, Republic Bank, 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.
To this end, the steering committee has engaged PricewaterhouseCoopers to develop a plan to rehabilitate the company and make operations to settle its obligations to its various creditor groups.
That timeline is between eight and 12 months.
Republic Bank argued that an order to wind up the company could jeopardise the initiative to the detriment of secured and unsecured creditors.
In making its case to the court, Republic Bank argued that should the company become operational, Small would be repaid.
Gill goes after the Government
Gill, in his defence, argued that NiQuan had received a favourable outcome from mediation between the company and the Trinidad and Tobago Upstream Downstream Company (TTUDEOCL), delivered by Lord Neuberger of Abottsbury on January 24, 2024.
Abottsbury had said that the gas agreement was not terminated and that TTUDEOCL was obliged to supply gas to the plant.
On January 23, 2024, TTUDEOCL’s attorneys said it did not accept the ruling on the contract and has appealed the matter.
Gill said that NiQuan was now proceeding with its claims against TTUDEOCL under ICC arbitration rules for significant loss, cost, and damages for breach of contract as opposed to specific performance of the gas supply contract.
Gill disclosed that in parallel with the ICC Arbitration proceedings, NiQuan and its parent entity (NiQuan Energy LLC, a United States registered limited liability company) will also be pursuing their claim against the Government of T&T under the International Centre for the Settlement of Investment Disputes (ICSID) Arbitration Rules for breach of the GORTT of the extant Bilateral Investment Treaty between T&T and the United States of America.
“These parallel legal proceedings are supported by NiQuan’s lead financial arranger and noteholders, shareholders, and other stakeholders. In the interim, the NiQuan Gas to Liquids (GTL) plant is under preservation of assets in silent mode. Further, the earlier legal proceedings initiated by NiQuan in the Trinidad courts seeking injunctive and declaratory reliefs against TTUDEOCL and the GORTT to compel the provision of the contracted guaranteed gas supply for NiQuan’s GTL plant to restart operations have been discontinued,” he said.