The Minister of Finance, Colm Imbert, must provide a full and detailed explanation of the sale of assets of the failed WGTL project to NiQuan Energy, including evidence of any due diligence procedure on the investment. The call comes from Leader of the Opposition Kamla Persad-Bissessar.
Speaking at the UNC Monday Night Forum on Monday 27 June 2016, Persad-Bissessar revealed that the controversial Gas to Liquids (GTL) project has become even more shrouded in clandestine secrecy with a new deal by Petrotrin executives.
The former Prime Minister stated according to news reports and statements made before the Joint Select Committee on State Enterprises by Petrotrin executives, NiQuan Energy has entered into an agreement to purchase the WGTL plant and assets for a transfer of US$10 Million, plus US$25 Million in preferential shares in NiQuan’s planned GTL business to Petrotrin.
“This presents grave financial risk to a company that is still suffering from the failure of the pre-2010 WGTL deal. The preferential shares would essentially constitute an investment of the Government of Trinidad and Tobago, on behalf of the taxpayer, in the GTL business that NiQuan intends to operate.”
“Petrotrin has willingly agreed to accept US$25 Million in shares instead of requiring that NiQuan Energy pay the entire purchase price by cash transfer. This means the country and therefore the taxpayer will not realize the full benefit of this sale unless NiQuan Energy is able to finance the completion of the WGTL plant and is able to profit from that plant. Needless to say if the project continues to fail, the taxpayer will lose another US$25 Million.”
Delivering the feature address at the UNC Monday Night Forum, Persad-Bissessar provided details of the deal, calling on Imbert to explain the basis of his approval of the deal. The Trinidad Express reported on November 6, 2015, “Petrotrin’s chairman Andrew Jupiter wrote to Finance Minister Colm Imbert seeking his approval to proceed with the sale of assets to NiQuan…”
“The court’s judgment in CV 2013-02699 NiQuan Energy Trinidad Limited v. World GTL Limited, Brian Hackett and Petroleum Company of Trinidad and Tobago Limited indicates that NiQuan Energy’s proposal documents which were sent to the World GTL Receiver were lacking.
“The court said: No concrete plan for funding is disclosed. NiQuan does not make a financial commitment or pledge any finance to its own putative subsidiary. Unnamed multiple financiers are said to be interested but nothing more”.
The Leader of the Opposition continued:
“Further in rejecting NiQuan Energy’s application for an injunction to prevent Petrotrin and the WGTL Receiver from negotiating with other companies with regards to the plant and assets, the court stated: [NiQuan] has also not demonstrated that it would be in a financial position to honour its undertaking in damages should the injunction be granted. According to its own evidence it has no ‘financial history’.”
The former Prime Minister further stated that the sole purpose of NiQuan Energy Trinidad Ltd is to pursue the purchase of the WGTL plant and assets. A review of its parent company’s (NiQuan Energy LLC) website shows no other activity other than the purchase of WGTL plant and assets even though the company has been in existence since 2008. In addition, it has been reported that the company does not have a GTL plant or a track record.
Petrotrin and the Minister of Finance had a duty to conduct the due diligence and review the assets and capability of NiQuan before entering into this sale and purchase agreement and agreeing forego cash transfers in favour of preferential shares valued at US$25 Million, Persad-Bissessar said.
Imbert must therefore answer what due diligence has been conducted by the Government in approving the sale and assets of the failed WGTL project to NiQuan Energy?