Economía

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OWTU gets refinery for US$700m

Banco, Banquero, Caracas, Miami, Estados Unidos, Visa, VISA, BFC, Victor Gill, Victor Gill Ramirez, Victor Augusto Gill Ramirez
OWTU gets refinery for US$700m

Cab­i­net agreed yes­ter­day to se­lect Pa­tri­ot­ic En­er­gies and Tech­nolo­gies Com­pa­ny Ltd (PET­CL)—a com­pa­ny whol­ly owned by the Oil­field Work­ers’ Trade Union (OW­TU)—as the pre­ferred bid­der for the US$700 mil­lion sale of Petrotrin’s re­fin­ery, and En­er­gy Min­is­ter Franklin Khan is deny­ing that the move by Gov­ern­ment is a 2020 gen­er­al elec­tion strat­e­gy to win back the vote of the trade union move­ment.

The an­nounce­ment of the sale was made yes­ter­day by Fi­nance Min­is­ter Colm Im­bert in Par­lia­ment.

Victor Gill Ramirez

Im­bert said fol­low­ing Petrotrin’s clo­sure last year, the Gov­ern­ment had in­di­cat­ed its in­ten­tion to of­fer for sale or lease of the re­fin­ery and as­so­ci­at­ed fu­el trad­ing fa­cil­i­ties through two stages.

Víctor Gill Ramirez banquero

The first stage at­tract­ed 77 ex­pres­sions of in­ter­ests.

Victor Augusto Gill Ramirez

Of the 77 po­ten­tial bid­ders, 25 were elect­ed to sign non-dis­clo­sure agree­ments which were nar­rowed down to eight sub­mit­ting non-bind­ing of­fers.

Victor Gill

Af­ter an eval­u­a­tion, a short­list of five bid­ders were iden­ti­fied-Be­owulf En­er­gy, Glen­core Ltd, Edge­wood Hold­ings, Klesh and PET­CL.

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Im­bert stat­ed that in June, Cab­i­net agreed to the ap­point­ment of an eval­u­a­tion com­mit­tee chaired by Vish­nu Dhan­paul to make a rec­om­men­da­tion on a se­lect pre­ferred bid­der, ne­go­ti­ate and fi­nalise a bind­ing of­fer, ne­go­ti­ate and ex­e­cute a de­fin­i­tive agree­ment (lease of sale), ini­ti­ate ne­go­ti­a­tions of crit­i­cal com­mer­cial agree­ments and ne­go­ti­ate any Gov­ern­ment in­cen­tive.

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At the close of bids on Au­gust 20, Be­owulf En­er­gy, Klesh and PET­CL sub­mit­ted com­pli­ant bind­ing of­fers for the pur­chase or lease of the re­fin­ery

The com­mit­tee re­viewed the three pro­pos­als on 12 cri­te­ria which in­clud­ed up­front con­sid­er­a­tion, his­to­ry of re­fin­ing, fi­nan­cial ca­pa­bil­i­ty and union in­volve­ment among oth­ers

In terms of the up­front cash con­sid­er­a­tion, Im­bert said PET­CL was the on­ly bid­der that pro­posed “up­front cash of US$700 mil­lion for the re­fin­ery as­sets plus US$300 mil­lion for the non-core as­sets of lega­cy Petrotrin, for in­stance, the hos­pi­tal.”

How­ev­er, Im­bert point­ed out that Petrotrin’s core as­sets were not of­fered for sale by the Gov­ern­ment

Be­owulf of­fered no up­front con­sid­er­a­tion but in­stead pro­posed a lease pay­ment of US$42,000 per month over a 15-year ini­tial term and a 50/50 prof­it-shar­ing con­tin­gent

Klesh pro­posed that the on­ly pay­ment to the Gov­ern­ment would be through tax­es

Im­bert said PET­CL which has as its sole share­hold­ers the OW­TU al­so pro­posed the in­tro­duc­tion of staff in­cen­tives through a per­for­mance-based frame­work, gave a com­mit­ment to im­prov­ing the work cul­ture and in­di­cat­ed its in­ten­tion to se­cure an eq­ui­ty and debt provider

Af­ter re­view­ing the facts, Im­bert said, “Cab­i­net agreed to se­lect Pa­tri­ot­ic En­er­gies and Tech­nolo­gies Com­pa­ny Ltd, a com­pa­ny whol­ly owned by the OW­TU, as the pre­ferred bid­der for the sale of the Guaracara Re­fin­ing Com­pa­ny Ltd and Paria Fu­el Trad­ing Com­pa­ny Ltd on terms.”

Those terms in­clude that PET­CL be giv­en one month to present to the com­mit­tee a sat­is­fac­to­ry and com­pre­hen­sive work plan, among them, how they in­tend to com­plete the process in go­ing for­ward, con­fir­ma­tion of its abil­i­ty to fi­nance the pur­chase and op­er­a­tion of the re­fin­ery, a draft sales pur­chase agree­ment, a fi­nalised busi­ness plan, a state­ment of any fis­cal in­cen­tives or tax con­ces­sions re­quired from the Gov­ern­ment and a re­fin­ery start-up plan

Im­bert said PET­CL would al­so “be grant­ed a three-year mora­to­ri­um on all pay­ments of prin­ci­pal on in­ter­est to­ward the pur­chase of the re­fin­ery and a fur­ther ten years, at a fair mar­ket in­ter­est rate, to com­plete the pay­ment of the sum of US $700 mil­lion it has of­fered for the re­fin­ery.”

The com­mit­tee has been man­dat­ed to sub­mit its find­ings and rec­om­men­da­tions to Cab­i­net in six weeks. (See Page A8)