Trinidad & Tobago: Cemex has struck a deal with the board of Trinidad Cement Limited (TCL) that will allow Cemex to increase its stake in TCL to at least 35%, with the option to add another 5%.
Cemex SAB de CV currently owns 20% of TCL, the maximum that was allowable per shareholder, through Sierra Trading. It has committed not to seek a stake higher than 40% of TCL under an accompanying deal to an upcoming rights issue. The deal, referred to as a Subscription Agreement, was signed by Sierra and TCL on the same day that TCL's shareholders voted to remove the cap on ownership of TCL shares.
Sierra will take up its full allowable allotment under the rights offer that gives shareholders the option to acquire one additional share for every two held. Some 124,882,568 shares will be available for subscription. If Sierra fails to reach its 35% ownership target at the close of the offer, "Then subject to receiving all required approvals, including shareholder approval, a private placement of TCL shares will be issued in favour of Sierra Trading in an amount that will permit Sierra Trading to achieve a shareholding of 35% of TCL's outstanding shares," said a Trinidad Cement spokesperson. The TCL board, under the leadership of chairman and shareholder Wilfred Espinet, also signed off on an 'exclusive' plan for Sierra to buy up the TCL shares that are not taken up during the rights offer, but under terms where Sierra's stake does not exceed 40% of the publicly traded company.
The ownership structure of TCL is undergoing changes that, according to the board, will facilitate a new debt-restructuring plan under negotiation with creditors. The loan agreements of 2012 that lengthened the maturity profile of the debt by six years were placed on hold by the current board while it negotiated a new deal. Consequently, TCL's US$315m of long-term debt was reclassified as short-term obligations.
