That might still be the case, but with the decision taken to mothball the refinery, there now stands a chance, the terms of the loan can be renegotiated. In other words, had it been business as usual at Petrotrin, the loan of US$850 million (TT$6 billion) would have to be repaid in its entirety in August 2019. These upgrades, while resulting in increased refinery throughput, have not led to the predicted increase in the gross refinery margin…The US$850 Million bond includes a bullet principal payment payable in August 2019…”Ī story carried by ‘ The Economist Intelligence Unit’ on Jsaid “…The report confirms our forecast that Petrotrin’s structural problems will continue to compound the government’s severe fiscal challenges…”.Ī bullet loan, such as the one I’ve repeatedly mentioned, is a loan where a payment of the entire amount of the loan is due on a specific date, unless the borrower shows it is prepared to change its operating model and the lender is willing to renegotiate. “…Petrotrin’s major long-term borrowings comprise two bonds: (i) US$750 Million, 6.00% – and (ii) US$850 Million, 9.75% – 14 August 2009… The US$750 Million bond is amortized with the final instalment being payable in May 2022… Petrotrin is currently servicing this bond from its cash flows. That report, officially called the Report of the Team to review the operations of PETROTRIN and make recommendations for its restructuring, contains many interesting facts. There’s that figure of US$850 million again.īudget 2014 mentioned “… the Government … mandated the company to refocus its strategy on the upstream sector…”.īudget 2017 spoke of “… unforeseen and unbudgeted Government guarantees to Petrotrin’s creditors of the order of $1.7 billion, which were unavoidable in 2016, because of the cash-strapped position of the company…”. In Budget 2008 the population was told “… The upgrade of the Pointe-à-Pierre Refinery … is proceeding at a cost of US$850 million …”. Petrotrin has been in the news on many an occasion over the past decade. TnT make international news! Readers can access the story online at. That story was titled ‘Trinidad to keep refinery going’. Once the Petrotrin decision was announced, an archival story-published in the New York Times newspaper of Monday, April 15, 1985-began making the rounds on social media. ‘Mothballing’ generally means to stop using a piece of equipment or a building but keep it in good condition so that it can readily be used again. The convulsions revolve around (i) a decision taken by the PM Rowley-led GORTT of the day, to mothball the refinery section of Petrotrin (ii) the impacts of the ‘mothballing’ on persons who will be unemployed as a result of the decision (iii) the figure of US$850 million or TT$6 billion. It’s no secret that as you’re reading this month’s instalment of ‘My Point of View’, the country is in convulsions-some contrived and some real. I decided to write about Petrotrin as an opportunity to lay out the bare facts and provide information on this issue. Guess you could run but hiding sometimes is difficult. So when the CN Editor said he hoped I would address the matter in my next column, I groaned. Email: deliberately shied away from the cacophony of opinions surrounding the Petrotrin issue. A monthly column by Dr Marlene Attzs, Economist.
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