Trinidad Petroleum pledges to address debt issues after S&P ratings downgrade

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A worker paints the fence of the Savannah building of Trinidad Petroleum Holdings, Queen’s Park West, Port of Spain. – SUREASH CHOLAI

S&P Global Ratings downgraded the rating of Trinidad Petroleum Holdings Ltd (TPHL) from BB to B+ in its latest overview on Wednesday.

The company attributed the downgrade to the late release of TPHL’s audited consolidated financial statements for 2019 and the tight maturity profile of upcoming debt payments.

TPHL, parent company of Heritage Petroleum and Paria Fuel Trading, released a statement Thursday expressing its disappointment with the demotion, saying “the company (TPHL) has been proactively working on both issues for some time, and we we expect them to be resolved in a timely manner.” not much time.”

TPHL has given the reasons for the problems and the means it plans to solve.
“In April 2021,” he writes, “the company preemptively began internal preparations to initiate a refinancing process to meet significant debt maturities in June 2022.

“In addition to lengthening the debt maturity profile, the successful completion of the contemplated refinancing would also significantly reduce borrowing costs given the strong performance of the operating companies over the past two years.”

He said he was close to assigning a lead arranger to guide him in executing the refinancing exercise, which is expected to be completed by May. This was done, the company said, after months of discussions with all stakeholders to ensure “a thorough, cost-effective and transparent process”.

The refinancing will allow the company to meet its short-term debt obligations, he said, adding that it is one of the actions that could lead to an upgrade from S&P over the next year.

Regarding the 2019 audited financial statements, TPHL said it engaged its lenders and the rating agencies describing the challenges it faced “on numerous occasions” when issuing the consolidated statements.

“Complications stem from the company’s reorganization in 2018, updated audit metrics, a significantly lower materiality threshold, specialist reviews relating to the presentation of financial statements after the reorganization, pension plan and valuation of assets that were not represented in previous audits.”

The TPHL 2019 financials, he said, can only be completed after the Petrotrin 2019 financials are finalized.

“We expect both to be completed and released within a few weeks, putting this issue behind us shortly.”

JTUM Chairman Ancel Roget said the downgrade showed TPHL “was a failure”, following the closure of Petrotrin in 2018 and the restructuring of its assets under the holding company.

He accused the TPHL of mismanagement, despite assurances that it was making and paying taxes by the late energy minister Franklin Khan.

“It was a matter of himself,” Roget said.

“Many of them are putting several thousand workers on the edge and a community under pressure,” he added during a demonstration in San Fernando.

He said the OWTU, which represented workers at Petrotrin, felt vindicated.

The OWTU had made several offers for the refinery which the government rejected. The government in 2021 said it had been considering several offers since then.

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