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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS<br />

FOR THE YEAR ENDED 31ST DECEMBER, 2010<br />

(Expressed in Thousands of Trinidad and Tobago Dollars, except where otherwise stated)<br />

(Continued)<br />

25. Assets classified as held for sale (continue)<br />

The net cash flows incurred by Island Concrete Products N.V/Island Concrete SARL for the year ended 31<br />

December 2010 are as follows:<br />

Operating (356)<br />

Investing –<br />

Financing –<br />

Net cash outflow (356)<br />

The overdraft facility held by Island Concrete Products N.V. attracts interest at the rate of 8.5% per annum (2009:<br />

8.5%) and is secured by a charge over the fixed and floating assets of that company and by a guarantee from<br />

Readymix (West Indies) Limited.<br />

26. Subsequent events and going concern<br />

At year end date Readymix (West Indies) Limited and its Subsidiaries (RMLG) were in compliance with all terms<br />

of its various loan agreements. In the post year end period, on 14 January 2011, RMLG’s ultimate parent company,<br />

Trinidad Cement Limited (<strong>TCL</strong>), publicly declared a moratorium on all debt service payments due by all entities<br />

in the <strong>TCL</strong> <strong>Group</strong>, inclusive of Readymix (West Indies) Limited and its subsidiaries.<br />

Challenged by weak demand volumes across most markets, <strong>TCL</strong> had commenced negotiation in 2010 with lenders<br />

for a re-profiling of its debt portfolio and the declaration was made after informal agreement with the majority of<br />

lenders who wanted to ensure adequate liquidity in the <strong>TCL</strong> <strong>Group</strong> to allow for continuity of business operations.<br />

Subsequent to the declaration, debt service payments falling due have not been made by <strong>TCL</strong> and RMLG. Most<br />

of the debt agreements are therefore in default either through non-payment of interest and/or principal or due to<br />

cross default clauses.<br />

The majority of lenders have formed a Steering Committee to participate in the re-profiling process and have<br />

caused the engagement of independent restructuring consultants and legal advisors. The restructuring consultants<br />

have completed their review and report on <strong>TCL</strong> and its Subsidiaries (<strong>TCL</strong>G) business plans and financial projections<br />

which will form the basis of the re-profiling negotiation.<br />

The specific features of the re-profiling are yet to be negotiated but <strong>TCL</strong> expects the exercise to be completed by<br />

30 September 2011.<br />

The arrangement between the majority of lenders and <strong>TCL</strong>G and the declaration of the moratorium on debt service<br />

payments are informal and not subject to any legal agreement between <strong>TCL</strong>G and the lenders. Notwithstanding<br />

the explicit action taken by the majority of lenders to undertake the re-profiling of <strong>TCL</strong>G’s debt portfolio and continued<br />

credit support, lenders have retained their rights to demand immediate repayment of all outstanding obligations<br />

which the <strong>TCL</strong>G and RMLG are not in a position to immediately meet. Should Lenders demand immediate<br />

repayment and initiate legal action to enforce their security there may be a risk to the going concern of RMLG.<br />

However, no legal action has been taken to pursue recovery and the majority of lenders have maintained their lines<br />

of short term operating credit to <strong>TCL</strong>G and RMLG at the levels existing at 14 January 2011. Moreover, lenders<br />

have actively participated in the re-profiling process and have given every indication of their willingness to negotiate<br />

a successful conclusion. The restructuring exercise is intended to facilitate the full repayment of the debt<br />

obligations and position <strong>TCL</strong>G and RMLG to prosper from the rebound in market conditions. On this basis, the<br />

Directors have maintained the going concern assumption in the preparation of these accounts.<br />

44<br />

BUILD TO LAST FOR GENERATIONS

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