Trinidad Cement Limited (TCL) has advised that there have been developments in the financial fortunes of the company`s largest shareholder, CEMEX, as a consequence of the global financial crisis . TCL also advised that the year 2008 has been a difficult one for CEMEX, which has been severely impacted by:
1. A sharp contraction in sales volumes in the U.S.A., Spain and the U.K.
2. A significant increase in the cost of debt and difficulty in refinancing.
3. High energy and transportation costs.
4. US$700 million losses on derivatives in the 3rd Quarter 2008.
5. Downgrades from rating agencies.
6. Nationalization of the Group`s Venezuelan Assets.
7. A negative tax ruling in Mexico.
8. A significant decline in its stock price. American Depository Receipts (ADRs) listed on the NYSE declined from a 52 week high of US$32 .61 to low of US$4.01.
CEMEX`s response to these difficulties has been to initiate cost cutting measures, to seek debt re-financing, and to dispose of selected assets . The Strategic Alliance Agreement between TCL and CEMEX which was implemented in 1994 expired in July 2004 and was not renewed . Its shareholding of
49,953,027 TCL shares, (20% of TCL`s issued share capital), represents a minority interest.
While the board of directors of TCL, has not been officially informed of CEMEX`s plans, information has been received from credible sources that the 20% shareholding in the company currently held by CEMEX will be divested as a part of its debt restructuring exercise.
The sale of CEMEX`s TCL shares will not in any way affect the TCL`s Group`s operations or its future prospects . TCL`s board is nevertheless, mindful of its responsibility to all of its stakeholders and will seek to ensure an orderly disposal of CEMEX`s interest in a manner which does not result in a loss in
shareholder value. In this regard, steps have been taken to engage CEMEX and or their representative agents in discussions on the matter.
