/raid1/www/Hosts/bankrupt/TCRLA_Public/240327.mbx
T R O U B L E D C O M P A N Y R E P O R T E R
L A T I N A M E R I C A
Wednesday, March 27, 2024, Vol. 25, No. 63
Headlines
A R G E N T I N A
ARGENTINA: Economy Was Slumping Even Before Milei's Shock Therapy
ARGENTINA: Milei Confident of Support as He Passes Milestone
B R A Z I L
BRAZIL: Industrial Goods Face a Tax Burden 28 Times Europe's Rate
C A Y M A N I S L A N D S
IIG GLOBAL: San Agustin Contract Enforceable, SDNY Judge Says
C H I L E
WOM MOBILE: Fitch Lowers LongTerm Foreign Currency IDR to 'CCC-'
C O L O M B I A
COLOMBIA: Central Banker Says Data Paves Way for Bigger Rate Cuts
M E X I C O
MEXICO REMITTANCES: Fitch Lowers Rating on 2021-1 Notes to 'BB'
P U E R T O R I C O
GRUPO HIMA: Seeks to Extend Plan Exclusivity to April 15
S U R I N A M E
SURINAME: IMF OKs Nonobservance Waiver of Performance Criterion
T R I N I D A D A N D T O B A G O
TRINIDAD AND TOBAGO NGL: Delays Publishing Year-end Results
- - - - -
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A R G E N T I N A
=================
ARGENTINA: Economy Was Slumping Even Before Milei's Shock Therapy
-----------------------------------------------------------------
Manuela Tobias at Bloomberg News reports that Argentina's economy
contracted in the fourth quarter of 2023, cementing a full year of
negative growth, even before incoming President Javier Milei
slashed spending as part of his shock therapy.
Gross domestic product fell by 1.9 percent compared with the
July-September period, according to official data released by the
INDEC national statistics bureau, notes Bloomberg News. Activity
contracted 1.4 percent from a year earlier, slightly less than the
median estimate of a 1.5 percent drop by economists surveyed by
Bloomberg.
Economists surveyed by the Central Bank forecast GDP will fall 3.3
per cent this year as austerity measures lead to a drop in
consumption, Bloomberg News notes. Milei took office on December
10 and immediately allowed the peso to weaken by more than 50
percent while cutting state spending, Bloomberg News relays.
As output expanded in the third quarter, the country managed to
avoid a technical recession, Bloomberg News notes. Even so, the
struggling economy has contracted for six of the last 10 years,
Bloomberg News relays.
Annual inflation accelerated to 276 percent last month, affecting
purchasing power as the value of pensions and wages erode,
Bloomberg News adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal
year 2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on March 15, 2024, raised its local currency
sovereign credit ratings on Argentina to 'CCC/C' from 'SD/SD' and
its national scale rating to 'raB+' from 'SD'. S&P also raised its
long-term foreign currency sovereign credit rating to 'CCC' from
'CCC-' and affirmed its 'C' short-term foreign currency rating.
The outlook on the long-term ratings is stable. In addition, S&P
revised its transfer and convertibility assessment to 'CCC' from
'CCC-'.
S&P said the stable outlook on the long-term ratings balances the
risks posed by pronounced economic imbalances and policy
uncertainties with the favorable change in near-term debt service
obligations. S&P also expect no further debt exchanges that it
would likely consider to be distressed.
Fitch Ratings upgraded on June 13, 2023, Argentina's Long-Term
Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from
'C'and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'.
Fitch typically does not assign Outlooks to sovereigns with a
rating of 'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a default
event of some sort appears probable in the coming years, regardless
of the outcome of upcoming elections. The affirmation of the LC IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
ARGENTINA: Milei Confident of Support as He Passes Milestone
------------------------------------------------------------
Buenos Aires Times reports President Javier Milei defended his
administration's record as he celebrated 100 days in office,
claiming that he retains the support of the population despite
ongoing economic turmoil.
Argentina's political direction took a 180-degree turn when Milei
took office on December 10. The La Libertad Avanza leader
immediately slashed public spending and began tackling inflation -
which is slowly decelerating (25.5 percent in December, 20.6
percent in January and 13.2 percent in February) - but 100 days
into his Presidency social tensions are simmering and he is still
struggling to pass his flagship economic reforms, according to
Buenos Aires Times.
The past weeks has seen another series of demonstrations against
his government and its austerity measures, with picket groups and
social organizations calling for greater food aid and welfare, the
report notes.
In the absence of recent official figures, UCA's Social Debt
Observatory estimated this month some 57 percent of the country is
now living in poverty, the report relays.
"The hunger in the neighbourhoods is terrible. They haven't
delivered goods to the soup kitchens for four months and the kids
need it," said Maria Medina, from the leftist organisation Polo
Obrero, during a demonstration in Buenos Aires, the report
discloses.
Milei took office warning things would get much worse for
Argentines before they get better, and they have, the report
relays. He started out by devaluating the peso by 54 percent, and
removing price controls, the report notes.
These measures, along with the removal of fuel and transport
subsidies, have seen Argentines' purchasing power plummet, causing
a slowdown in consumption and economic growth, the report
discloses.
Monthly inflation is starting to cool, but annual inflation still
stood at 276 percent in February, the report relays.
"It is clear to me that seven out of ten Argentines are having a
worse time. I know that people are clear about it," Milei told
journalist Luis Majul in an interview, quoting a poll by the Aresco
consultancy firm in which respondents refer to their personal
economic situation, the report relays.
Some experts say that Milei's stabilization plan is bearing fruit,
but they warn it may come at a cost, the report notes.
"Stabilisation is working, better than one originally imagined, but
there are questions about governance," independent economist Marina
Dal Poggetto said in a recent television interview, the report
notes.
Confident of Support
Nevertheless, Milei remains confident he retains the support of the
population, highlighting that the Aresco survey showed that 54
percent of respondents approved of his management, compared to 44
percent who responded negatively, the report relays.
Others aren't so positive, a poll by Zuban Cordoba showed that
rejection of Moilei's government had risen to 57.4 percent, a
change of three points from the previous month, the report relays.
Moreover, 55 percent said they believed the government is going in
the wrong direction, the report discloses.
That survey tracks with others. According to another new poll by
the Atlas Intel consultancy firm, carried out between March 15 and
18, 47.7 percent approve of Milei's administration, with
disapproval just 0.1 points lower - too close to call, the report
relays. Almost five percent did not know how to answer the
question, the report notes.
This national study, with a +/- two-point margin of error and a
reliability level of 95 percent, showed that 45.1 percent consider
the government "bad or very bad," while for 43.5 percent it is
"excellent or good," the report relays. In the middle, 10.5
percent of people catalogued the performance by the libertarian
leader as "regular," the report notes.
Breaking down the performance, Milei's government ranked positively
in three areas: "transparency and combatting corruption," "economic
management and fiscal responsibility" and foreign relations, the
report notes.
Negative reviews were offered for "public security, employment,
social policy and reduction of poverty," "education and culture,"
and "public works, health, tourism and the environment," the report
relays. Asked to compare his government to that of his
predecessor, former president Alberto Fernandez, Milei ranked
higher in most areas, with the Peronist leader outperforming him on
education, culture, employment, poverty reduction, health, public
works, the environment and tourism, the report notes.
Diving down into the performance of ministers, the survey showed
that Milei's top-performing official is Security Minister Patricia
Bullrich, who was the only figure to report a positive differential
(50 percent positive to 48 negative), the report notes.
Economy Minister Luis Caputo and Human Capital Minister Sandra
Pettovello produced negative reviews, ranking 43-53 and 41-47
respectively, the report relays.
Church Concerns
Adding its voice to growing concerns, the local branch of the
Catholic Church used Milei's centennial anniversary to warn of a
"climate of extremely high social fracture" due to extension job
layoffs and the government's austerity measures, the report
relays.
A statement from the National Commission for Justice and Peace
(CNJP), a body that depends on the Argentine Synod and is made up
mostly of lay people, expressed concern over "a persistent fall in
salaries in the public and private sector," the report notes.
"We are even more concerned that the shock of the austerity has
fallen on the accounts of pensions and contributory pensions which,
by its magnitude, accounts for a third of the cuts, registering a
very serious decrease in retirement income and health and
disability benefits," they said in a statement obtained by the news
agency.
"The loss of jobs is a painful fact," it added, highlighting
"worrying reports" from various economic sectors, the report
relays.
Milei's "chainsaw" plans have delivered "permanent cuts in the
areas of public policy management," impacting basic rights such as
health and education and "primary needs such as food itself," the
report notes.
"The situation in the soup kitchens is urgent, due to the increase
in the number of people attending and the lack of food provision,"
said the group, echoing concerns voiced by Monsignor Oscar Ojea,
the Bishop of San Isidro, the report relays.
Criticising the "social aggressiveness" perpetrated by the
president online, the Church group warned of "an enormous degree of
social insensitivity on the part of the authorities in the
adjustment measures" and slammed the "culture of hatred and extreme
individualism generated," the report adds.
About Argentina
Argentina is a country located mostly in the southern half of South
America. Its capital is Buenos Aires. Javier Milei is the current
president of Argentina after winning the November 19, 2023 general
election. He succeeded Alberto Angel Fernandez in the position.
Argentina has the third largest economy in Latin America. The
country's economy is an upper middle-income economy for fiscal year
2019, according to the World Bank. Historically, however, its
economic performance has been very uneven, with high economic
growth alternating with severe recessions, income maldistribution
and in the recent decades, increasing poverty.
The IMF's executive board completed on August 23, 2023, the fifth
and six reviews of Argentina's 30-month Extended Fund Facility
(EFF), and approved a US$7.5-billion disbursement to Argentina as
part of the larger program, which refinances payments Argentina
owes the institution from a previous bailout that failed to
stabilize the economy in 2018. Argentina would receive another IMF
disbursement in November of about US$2.75 billion pending another
staff-level agreement and board approval.
S&P Global Ratings, on March 15, 2024, raised its local currency
sovereign credit ratings on Argentina to 'CCC/C' from 'SD/SD' and
its national scale rating to 'raB+' from 'SD'. S&P also raised its
long-term foreign currency sovereign credit rating to 'CCC' from
'CCC-' and affirmed its 'C' short-term foreign currency rating. The
outlook on the long-term ratings is stable. In addition, S&P
revised its transfer and convertibility assessment to 'CCC' from
'CCC-'.
S&P said the stable outlook on the long-term ratings balances the
risks posed by pronounced economic imbalances and policy
uncertainties with the favorable change in near-term debt service
obligations. S&P also expect no further debt exchanges that it
would likely consider to be distressed.
Fitch Ratings upgraded on June 13, 2023, Argentina's Long-Term
Foreign Currency (FC) Issuer Default Rating (IDR) to 'CC' from
'C'and affirmed the Long-Term Local Currency (LC) IDR at 'CCC-'.
Fitch typically does not assign Outlooks to sovereigns with a
rating of 'CCC+' or below.
The upgrade of the FC IDR reflects that Fitch no longer deems a
default-like process to have begun, as the authorities have not
signaled a clear intention to follow through with an intra-public
debt swap announced in March. The new 'CC' rating signals a default
event of some sort appears probable in the coming years, regardless
of the outcome of upcoming elections. The affirmation of the LC IDR
at 'CCC-' follows the peso debt swap in June that Fitch did not
deem to be a "distressed debt exchange" (DDE).
Moody's Investors Service, in September 2022, affirmed Argentina's
Ca foreign-currency and local-currency long-term issuer and senior
unsecured ratings. The outlook remains stable. The decision to
affirm the Ca ratings balances Argentina's limited market access,
weak governance, and history of recurrent debt restructurings with
recent efforts to marshal fiscal and monetary measures to start
addressing underlying macroeconomic imbalances in the context of
the IMF program that was approved in 2022, according to Moody's.
DBRS, Inc. confirmed Argentina's Long-Term Foreign Currency Issuer
Rating at CCC and downgraded its Long-Term Local Currency Issuer
Rating to CCC from CCC (high) on March 3, 2023.
===========
B R A Z I L
===========
BRAZIL: Industrial Goods Face a Tax Burden 28 Times Europe's Rate
-----------------------------------------------------------------
Richard Mann at Rio Times Online reports that Febrafite, the
esteemed national association of state tax auditors in Brazil, has
highlighted the stark contrast between Brazil and Europe regarding
tax accumulation.
Their comprehensive study meticulously examines the tax burden
across a variety of products, uncovering significant disparities,
according to Rio Times Online.
In Brazil, a complex tax system results in taxes stacking up at
numerous stages within production chains, significantly
complicating the business landscape, the report notes.
In an ambitious move to streamline this cumbersome system, the
Brazilian government enacted a tax reform, adds the report.
About Brazil
Brazil is the fifth largest country in the world and third largest
in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian
general election. He was sworn in on January 1, 2023, as the 39th
president of Brazil, succeeding Jair Bolsonaro.
S&P Global Ratings raised on Dec. 19, 2023, its long-term global
scale ratings on Brazil to 'BB' from 'BB-'. The outlook on the
long-term ratings is stable. S&P affirmed Brazil's global scale
short-term ratings at 'B' and its national scale long-term rating
at 'brAAA'. S&P also raised the transfer and convertibility
assessment on the country to 'BBB-' from 'BB+'. S&P said, "The
stable outlook reflects our expectation that Brazil will maintain
a
strong external position, thanks to strong commodity output and
limited external financing needs. We also believe Brazil's
institutional framework can sustain stable and pragmatic
policymaking based on extensive checks and balances across the
executive, legislative, and judicial branches of government. We
expect a very gradual fiscal correction but anticipate fiscal
deficits will remain large."
Fitch Ratings affirmed on Dec. 15, 2023, Brazil's Long-Term
Foreign-Currency Issuer Default Rating (IDR) at 'BB' with a Stable
Outlook. Fitch said Brazil's ratings are supported by its large and
diverse economy, high per-capita income, and deep domestic markets
and a large cash cushion that support the sovereign's financing
flexibility and its high local-currency debt share. Strong external
finances support resilience to shocks, underpinned by a flexible
exchange rate, robust international reserves and a sovereign net
external creditor position. The ratings are constrained by weak
economic growth potential, relatively low governance scores, high
and rising government debt/GDP, and budgetary rigidities. A new
fiscal framework introduced this year aims to anchor a gradual
consolidation process and address these fiscal weaknesses, but its
effectiveness is increasingly unclear.
Moody's credit rating for Brazil was last set at Ba2 in 2018 with
stable outlook. Moody's affirmed the Ba2 issuer ratings and
senior unsecured bond ratings in April 2022.
DBRS Inc., on August 15, 2023, upgraded Brazil's Long-Term
Foreign and Local Currency - Issuer Ratings to BB from BB (low).
At the same time, DBRS Morningstar confirmed Brazil's
Short-term Foreign and Local Currency - Issuer Ratings at R-4.
The trend on all ratings is Stable (March 2018).
===========================
C A Y M A N I S L A N D S
===========================
IIG GLOBAL: San Agustin Contract Enforceable, SDNY Judge Says
-------------------------------------------------------------
Judge Edgardo Ramos of the United States District Court for the
Southern District of New York affirmed an April 27, 2023, order
entered by United States Bankruptcy Judge Michael E. Wiles granting
summary judgment in favor of IIG Global Trade Finance Fund Ltd. And
IIG Structured Trade Finance Fund Ltd., and denying summary
judgment in favor of San Agustin Energy Corp. in an adversary
proceeding between the parties.
The district court case is styled, In re: IIG GLOBAL TRADE FINANCE
FUND, LTD. et al., SAN AGUSTIN ENERGY CORP., Appellant, Appellant,
v. IIG GLOBAL TRADE FINANCE FUND LTD. and IIG STRUCTURED TRADE
FINANCE FUND LTD., Appellees, Nos. 23-cv-4350, 23-cv-6611
(S.D.N.Y.)
The sole issue on appeal is whether the Bankruptcy Court erred in
finding that the parties entered into an enforceable agreement
pursuant to which San Agustin assumed all obligations for the
borrowers of certain outstanding loans.
San Agustin is a Panamanian corporation. Global Trade and
Structured Trade are limited liability companies incorporated in
the Cayman Islands. Global Trade and Structured Trade are in
official liquidation before the Grand Court of the Cayman Islands.
On appeal, the parties do not dispute that Global Trade and
Structured Trade are the assignees of an entity called Trade
Financial Trust.
To finance its acquisition of certain oil fields in Colombia from
non-party Pacific Stratus, on March 10, 2014, Valle Energy Inc. and
one of its subsidiaries, Lakeview Green Corp., entered into a loan
agreement with IIG Capital, LLC, which acted as an agent for a
lender. While the March 2014 Loan Agreement did not name the
lender for whom IIG Capital was acting as an agent, the parties do
not dispute that the lender was Trade Finance Funding I, Ltd.
On November 20, 2015, Valle acquired all of the shares of San
Agustin's immediate parent company, making San Agustin an indirect
wholly owned subsidiary of Valle. Accordingly, on November 20,
2015, the conditions as to the effective date of San Agustin's
conditional guarantee were satisfied, making San Agustin a
guarantor of Valle and Lakeview's loan.
Separate from the March 2014 Loan Agreement, on December 3, 2015,
Valle entered into a loan agreement with another entity associated
with IIG Capital, IIG TOF B.V. Unlike in the March 2014 Loan
Agreement, IIG TOF served as the direct lender rather than through
an agent, and under the express contract terms was allowed to
assign its rights at any time and/or to sell participation
interests in any outstanding loans.
Instead of pursuing default remedies after the loans were not
repaid, in October 2016, the parties began discussing possible
amendments to both loan agreements.
During the month of September 2019, San Agustin and TFT discussed a
possible fifth amendment to consolidate the March 2014 and December
2015 Loan Agreements.
On October 15, 2019, a representative of TFT emailed a
representative of San Agustin a copy of the Fifth Amendment
executed on the same date by TFT.
On November 1, 2019, a representative of San Agustin emailed a
representative of TFT a copy of the Fifth Amendment, which San
Agustin had revised in certain respects, executed by San Agustin on
October 28, 2019. San Agustin forwarded its copy of the Fifth
Amendment along with a cover email.
On November 20, 2019, San Agustin's counsel sent a signed, proposed
modified amendment to TFT, along with the signed pledge agreement,
executed promissory note, and the officers' certificates. In the
Proposed Modified Fifth Amendment, San Agustin, among other, minor,
revisions, purported to extend the maturity date by six months.
On October 8, 2020, the Bankruptcy Court approved the assignment by
TFT to Global Trade and Structured Trade, of TFT's "right, title
[and] interest in" a series of loans, including the $15,450,000
principal amount to "Valle Energy Inc." that remained outstanding
pursuant to the Fifth Amendment.
On March 12, 2021, Global Trade and Structured Trade brought an
adversary proceeding against San Agustin in bankruptcy court to
recover the unpaid loan obligations, alleging, among other causes
of action, that San Agustin breached its payment obligations
pursuant to the Fifth Amendment.
Global Trade and Structured Trade filed an amended complaint on
July 8, 2021, which became the operative complaint in the
underlying action.
On August 13, 2021, San Agustin filed a motion to dismiss, which
the Bankruptcy Court denied on September 28, 2021. San Agustin
answered the amended complaint on October 7, 2021.
On June 30, 2022, San Agustin moved for summary judgment. Global
Trade and Structured Trade cross-moved for summary judgment that
same day. The Bankruptcy Court held oral argument on October 4,
2022. During oral argument, Global Trade and Structured Trade
agreed that the effective date of the Fifth Amendment could be
determined to be whatever most benefitted San Agustin, and
subsequently incorporated that concession into their damage
calculations.
On April 27, 2023, the Bankruptcy Court issued its decision
granting summary judgment to Global Trade and Structured Trade. The
court found "the relevant facts are not in dispute, and that the
Fifth Amendment was validly executed by the parties and is
enforceable."
San Agustin filed its Notice of Appeal on May 11, 2023. On July 21,
2023, San Agustin filed a Notice of Appeal of an amended judgment
entered by the Bankruptcy Court in the underlying matter, which was
docketed as a separate appeal.
On August 1, 2023, the Court accepted the case as related to No.
23-cv-4350. With the consent of Global Trade and Structured Trade,
San Agustin moved to consolidate the two cases, a request which the
Court granted on August 16, 2023.
San Agustin argues that the Fifth Amendment is not valid because
the parties executed materially different versions, and therefore
did not mutually assent to be bound by the agreement. Global Trade
and Structured Trade respond that the Bankruptcy Court correctly
determined that the Fifth Amendment is valid because any minor
textual differences between October 15, 2019 and the October 28,
2019 versions are immaterial.
According to Judge Ramos, there is no dispute that the parties
signed the Fifth Amendment on different days and that there are
differences between the October 15, 2019 and October 28, 2019
versions. However, the Court states these differences only matter
if they are material, or in other words, affect the parties' rights
and obligations pursuant to the contract.
San Agustin first alleges that the different "as of" dates in the
versions executed by the parties results in different effective
dates of the agreement, which constitutes a material difference
because it affects the calculation of interest due on the
outstanding loans. San Agustin also argues the different "as of"
dates render the Fifth Amendment ambiguous as to its start date.
The District Court finds these arguments are without merit, because
each version of the Fifth Amendment expressly identifies the
effective date as the "date of its signature." Accordingly, the
effective date of the Agreement is October 28, 2019, the date by
which it was fully executed by both parties.
Indeed, New York state courts have found that immaterial
differences like changed dates that do not affect the parties'
liabilities do not impact the validity of a contract.
Second, San Agustin argues that the Bankruptcy Court's decision
changed the contractual meaning of effective date from "as the date
of its signature" to "as the last date it was signed by the
parties. This argument implies that the parties intended for the
Fifth Amendment to be signed on the same day, but the Fifth
Amendment contains no such requirement. Additionally, the Court
notes San Agustin never explains why such a change would constitute
a material difference.
Third, even assuming the differences between the two versions of
the Fifth Amendment are immaterial, San Agustin contends that
because the Fifth Amendment only contemplated counterparts to be
signed if they were exactly identical, even minor differences
between the versions are sufficient to prevent the agreement from
being enforced.
To support its argument, San Agustin cites to Black's Law
Dictionary and a source from the Cornell Law School Legal
Information Institute that define a counterpart as a duplicate or
copy. However, the District Court finds the mere definition of a
counterpart does not support San Agustin's claim that in order to
be valid, counterparts must be identical. This is especially true
when San Agustin offers no caselaw to support its theory.
The District Court agrees with the Bankruptcy Court that the
immaterial changes made by San Agustin to the Fifth Amendment still
resulted in a binding contract.
The Court upholds the Bankruptcy Court's judgment that there were
no material differences between the October 15, 2019, and the
October 28, 2019 versions of the Fifth Amendment.
San Agustin next argues that the Fifth Amendment never became
effective because San Agustin failed to deliver the signed pledge
agreement, executed promissory note, and the officers' certificates
described in the Fifth Amendment, and only turned those documents
over to TFT in relation to the Modified Proposed Fifth Amendment.
In contrast, Global Trade and Structured Trade represent that the
Fifth Amendment had no conditions precedent to its becoming
effective other than the parties' signature.
The District Court notes both versions of the Fifth Amendment
provide that San Agustin "will deliver" an executed note, "shall
deliver" officer certificates, and "shall execute and deliver" a
pledge of stock. The language of the Amendment does not include
unmistakable words indicating that a condition precedent to
contract formation exists. Accordingly, the Court agrees with the
Bankruptcy Court that the delivery of certain additional documents
was not required before the Fifth Amendment became effective.
San Agustin separately contends that, on the basis of extrinsic
evidence including the Proposed Modified Fifth Amendment and
November 1, 2019 cover email, the parties did not intend for the
Fifth Amendment to be binding. Global Trade and Structured Trade
argue that considering extrinsic evidence is not warranted because
the Fifth Amendment is unambiguous, and even if considered, that
any extrinsic evidence does not show a lack of intent to be bound.
San Agustin argues that the Fifth Amendment is ambiguous as to its
effective date and whether the delivery of certain ancillary
documents was a condition precedent to its becoming effective. The
District Court finds San Agustin's arguments unavailing. The plain
language of the Fifth Amendment resolves these issues, and the
Court considers extrinsic evidence of the parties' intent only
where that plain language yields ambiguity.
San Agustin also contends that extrinsic evidence is necessary to
show that the parties lacked intent to be bound by the agreement.
Global Trade and Structured Trade argue that considering extrinsic
evidence is not warranted because the Fifth Amendment is
unambiguous, and even if considered, that any extrinsic evidence
does not show a lack of intent to be bound.
Finally, San Agustin argues that there is an exception to the parol
evidence rule that a party can always allege that an agreement did
not go into effect. Under New York law, the parol evidence rule
"bars the consideration of extrinsic evidence of the meaning of a
complete written agreement if the terms of the agreement,
considered in isolation, are clear and unambiguous."
The District Court notes San Agustin did not make arguments
regarding an exception to the parol evidence rule in the underlying
bankruptcy proceedings. Generally, a district court will not
address arguments that were not presented to the bankruptcy court.
A copy of the Court's decision dated March 12, 2024, is available
at https://tinyurl.com/yze77uby
Hedge fund IIG Global Trade Finance Fund Ltd. commenced Chapter 15
bankruptcy proceedings (Bankr. S.D.N.Y. Case No. 20-10132) on
January 17, 2020, to seek recognition of its proceedings in the
Cayman Islands. The petition was filed by Christopher Kennedy and
Alexander Lawson of Alvarez and Marsal Cayman Islands Ltd. John A.
Pintarelli, Esq., at Morrison & Foerster LLP, represents the
Chapter 15 petitioners.
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C H I L E
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WOM MOBILE: Fitch Lowers LongTerm Foreign Currency IDR to 'CCC-'
----------------------------------------------------------------
Fitch Ratings has downgraded the Long-Term Foreign Currency and
Local Currency Issuer Default Ratings (IDRs) of WOM Mobile S.A.
(WOM) to 'CCC-' from 'B-'. Fitch has also downgraded the unsecured
U.S.-dollar-denominated bonds issued by Kenbourne Invest S.A.
(Kenbourne Invest) to 'CCC-'/'RR4' from 'B-'/'RR4'. The bonds
issued by Kenbourne Invest are secured by WOM Mobile S.A. and its
subsidiaries. The Rating Watch Negative has been removed.
The downgrades reflect WOM's weak liquidity position and heightened
refinancing risk given delays in the refinancing process of the
company's 2024 notes as the maturity date continues to approach.
Additionally, FCF is likely to remain negative through at least
2024, further straining liquidity. Unless the company can reach a
deal with potential creditors and/or shareholders or raise
sufficient cash through a sale of assets to refinance its 2024
bonds over the next three months, further downgrades are likely to
occur given the increased risk of a debt restructuring or a
distressed exchange.
KEY RATING DRIVERS
Heightened Refinancing Risk: The company is in active discussions
with potential lenders and investors to try to refinance its senior
unsecured notes due November 2024 (USD348 million outstanding as of
3Q23); however, the process has reportedly been delayed. Fitch
believes an exchange could be a potential outcome given challenging
credit market conditions and limited time to maturity for the
notes.
Negative but Improving FCF: Fitch projects negative FCF through
2024, largely due to elevated levels of capex as the company
continues to roll out its 5G network and build capacity to meet
growing demand for 4G and 5G service. Fitch expects EBITDA margins
to expand slightly in 2024 driven by modest subscriber growth,
stabilization of ARPUs, and cost containment efforts. An adverse
outcome relating to the company's disputed delays in 5G tower
coverage requirements could further pressure FCF if WOM is required
to pay fines in the near-term. Reaching positive FCF over the next
couple of years will depend on executing on cost reduction efforts
and ARPU enhancements without impairing market position.
Competitive Telecom Market: The Chilean telecom market remains very
competitive, as incumbent operators have had to cut prices and
improve service to defend market share, pressuring margins and cash
flow. Fitch expects industrywide mobile ARPU to remain pressured in
the near term, although cost pressures impacting all of the mobile
operators and WOM's success in growing its market share have led to
somewhat improving pricing rationality in the mobile market. The
Chilean mobile market is relatively mature, although the ongoing
migration from prepaid to post-paid and the attendant growth in
data consumption present opportunities.
Proven Operating Track Record: After WOM launched in mid-2015, it
scaled rapidly, reaching approximately 8.0 million customers, more
than half of which are post-paid. The company has taken market
share from larger incumbents through its disruptive marketing
campaign, based on brand recognition, gigabyte-per-Chilean peso
value and retail experience. Fitch expects the company's market
share to grow modestly, but growth in market share will be more
modest than in prior years given greater focus on improving
profitability.
DERIVATION SUMMARY
WOM's ratings reflect the company's impressive operational track
record in Chile since its launch and Fitch's expectation that the
company will maintain high leverage. WOM has higher leverage and
weaker scale and diversification compared to Chilean rival
Telefonica Moviles Chile S.A. (BBB-/Stable). WOM is expected to
carry higher net leverage over the medium term than mobile leader
Empresa Nacional de Telecomunicaciones S.A.'s (Entel;
BBB-/Stable).
Chilean fixed-line provider VTR Finance N.V. (VTR; CCC-) is similar
to WOM in scale, while VTR's market position in fixed telecom
services has quickly deteriorated in recent years, resulting in a
weakened credit profile. Uncertainty surrounding VTR's joint
venture with Claro Chile has also weighed on VTR's credit profile.
Relative to Axtel (BB-/Stable), a Mexican B2B-focused telecom
operator, WOM has more consistently generated positive revenue and
EBITDA growth in recent years. Axtel however has been able to
sustain greater EBITDA margins and positive FCF whereas WOM has
demonstrated consistently negative FCF.
KEY ASSUMPTIONS
- Mobile subscribers grow to around 8.4 million by 2024, with more
than 50% post-paid consumers; service ARPUs flat to up slightly
over the rating horizon; fiber-optic network contributions are
minor;
- Revenue grows to around CLP760 billion by 2025;
- EBITDA margins declining to around 21% in 2023 from 22% in recent
years, reflecting the incremental lease expense; gradually
improving to exceed 22% longer term;
- EBITDAR margins (excluding leases) gradually improving to around
39% over the rating horizon from 32% in 2022, benefiting from
economies of scale and cost containment initiatives;
- Capex around 37% of revenue in 2023, 20% in 2024, and around 13%
thereafter;
- Net leverage (expensing leases) above 4.0x in 2023, trending
below 3.0x over the rating horizon;
- Net leverage (capitalizing leases) around 5.4x in 2023, trending
below 4.5x over the rating horizon.
RECOVERY ANALYSIS
Fitch's criteria consider bespoke recovery analysis for issuers
with IDRs of 'B+' and below. The bespoke recovery analysis assumes
that WOM would be considered a going concern in bankruptcy and that
the company would be reorganized rather than liquidated.
WOM's going concern EBITDA of CLP90 billion is based on Fitch's
expectation of a sustainable, post-reorganization EBITDA level.
This compares with an LTM EBITDA of CLP140 billion and reflects
high levels of competition in the Chilean mobile market and the
company's limited financial flexibility. Fitch applied an
enterprise value/EBITDA multiple of 4.0x. This figure reflects
WOM's limited scale and the highly competitive environment in
Chile.
Fitch applies a waterfall analysis to the post-default enterprise
value based on the relative claims of debt in the capital
structure. Fitch's debt waterfall assumptions consider total debt
as of Sept. 30, 2023. The waterfall results in a 'RR4' Recovery
Rating for senior unsecured debt.
RATING SENSITIVITIES
Factors that could, individually or collectively, lead to positive
rating action/upgrade:
- An upgrade would be predicated on WOM successfully reaching a
deal to refinance its upcoming maturities and improve its liquidity
position.
Factors that could, individually or collectively, lead to negative
rating action/downgrade:
- Failure to address its refinancing needs, launching of a coercive
debt exchange or announcing a debt restructuring;
- Additional investments into WOM Colombia that would impair WOM
Chile's liquidity position and prevent sustained deleveraging;
- Higher than expected fines materializing or additional liquidity
deterioration.
LIQUIDITY AND DEBT STRUCTURE
Weak Liquidity: WOM has weak liquidity, with elevated refinancing
risk given the limited amount of time remaining to refinance its
2024 notes. The company is also expected to remain in a position of
negative FCF in 2024 driven by high investment needs and a
persistently competitive environment. As of September. 30, 2023,
WOM had CLP9 billion of cash (about 64% of which is in USD) with
short-term debt consisting of CLP14 billion in bank loans. Fitch
also includes WOM's off-balance-sheet A/R factoring facility with
IDB Invest as short-term debt. As of Sept. 30, 2023, the debt
maturity profile for the outstanding notes was USD348 million in
2024 and USD290 million in 2028.
ISSUER PROFILE
WOM Mobile S.A. is a Chilean telecommunications provider whose
primary business is the provision of mobile services. The company
was formed in 2015 after Novator Partners LLP purchased Nextel
Chile S.A.'s assets out of bankruptcy.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
Entity/Debt Rating Recovery Prior
----------- ------ -------- -----
WOM Mobile S.A. LT IDR CCC- Downgrade B-
LC LT IDR CCC- Downgrade B-
Kenbourne
Invest S.A.
senior
unsecured LT CCC- Downgrade RR4 B-
===============
C O L O M B I A
===============
COLOMBIA: Central Banker Says Data Paves Way for Bigger Rate Cuts
-----------------------------------------------------------------
Bloomberg News reports that Colombia's slowing inflation and weak
economy call for more aggressive interest rate cuts, though
policymakers must remain vigilant to potential risks ahead,
according to a member of the central bank's board.
The fact that inflation has been above target for the past three
years demands prudence, even after it eased in February to the
slowest pace in nearly two years, central bank co-director Bibiana
Taboada said in an interview, according to Bloomberg News.
"Since the last meeting, we said that if inflation allows it and
that the data in general allows it, we saw the possibility of
having cuts of a slightly larger size," she said, notes the report.
"The information that has been coming out is moving in that
direction."
The report notes that Colombia still has the highest borrowing
costs among Latin American inflation-targeting economies following
two cuts of a quarter point each, which brought the key rate down
to 12.75%, the report relays.
Since the bank's board met in January, inflation data has shown
that the El Nino weather phenomenon hasn't delivered big shocks to
food prices, although there are doubts about its impact on energy
from hydroelectric plants, the report relays.
The effects of indexation from a 12% hike in the minimum wage
haven't been sharp, except for some metrics in rents and education,
the report adds.
===========
M E X I C O
===========
MEXICO REMITTANCES: Fitch Lowers Rating on 2021-1 Notes to 'BB'
---------------------------------------------------------------
Fitch Ratings has downgraded the rating for the outstanding series
of notes issued by Mexico Remittances Funding Fiduciary Estate to
'BB' from 'BB+'. The Rating Outlook is Stable. The rating actions
reflect the recent downgrade of Nueva Elektra del Milenio's (NEM)
Local Currency Long-Term Issuer Default Rating (LC LT IDR) to 'BB-'
from 'BB' on March 11, 2024.
The rating's one-notch uplift from the originator's LC LT IDR
reflects the strength of cash flows and the transaction structure.
The rating also considers the high future flow debt relative to
NEM's liability structure.
Entity/Debt Rating Prior
----------- ------ -----
Mexico Remittances
Funding Fiduciary
Estate
2021-1 593035AA6 LT BB Downgrade BB+
TRANSACTION SUMMARY
The future flow program is backed by existing and future
reimbursement remittance transactions (RRT) originated mainly in
the U.S. These are processed by NEM money transfer operators
(MTOs), which transfer remittances to NEM via a reimbursement
mechanism model. The majority of RRTs are processed by MTOs that
execute notice and consent agreements, irrevocably obligating the
designated remitters (DRs) to make payments to an account
controlled by the transaction trustee. Fitch's rating addresses
timely payment of principal and interest (P&I) on a quarterly
basis.
KEY RATING DRIVERS
Future Flow Rating Driven by Originator's Credit Quality: The
rating of this future flow transaction is tied to the credit
quality of the originator, NEM. NEM's credit ratings are highly
linked to its parent, Grupo Elektra, S.A.B. de C.V. (Elektra;
BB-/Stable), given the strategic role NEM plays in consolidating
the group's commercial business. On March 11, 2024, Fitch
downgraded Grupo Elektra and NEM's LC LT IDRs to 'BB' from 'BB+'.
The downgrade reflects Fitch's concerns about corporate governance
practices at Grupo Salinas, which controls Elektra, Total Play and
TV Azteca through different entities. For further details on the
originator's downgrade, please see " Fitch Downgrades Elektra's
IDRs to 'BB-'; Outlook Stable " dated March 11, 2024.
Notching Differential Limited by Going Concern Assessment (GCA)
Score: Timely payment on the notes depends on the ongoing
performance of NEM's remittance business. NEM's GCA score of '3'
acts as a cap for the transaction rating. The GCA score provides an
indication of the likelihood that NEM continues to operate in the
event of default. The GCA score of '3' could allow for up to a
two-notch rating differential between the IDR of the originator and
the issuance; however, additional factors limit the maximum
uplift.
Notching Uplift from LC IDR Limited by Several Factors: The GCA
score allows for a maximum two-notch rating uplift from the
company's Local-Currency IDR, pursuant to Fitch's future flow
methodology. However, uplift is tempered to one notch from NEM's
IDR due to factors mentioned below, including the relatively high
future flow debt relative to the company's balance sheet.
Future Flow Debt Relative to NEM's Balance Sheet: NEM has a limited
funding mix given that majority of funding is held at the parent
level. Additionally, the majority of liabilities held on NEM's
balance sheet are current liabilities due to affiliated companies.
The series 2021-1 notes represent approximately 78.3% of NEM's
total funding utilizing financials as of September 2023. Fitch also
considered total future flow debt relative to Elektra's balance
sheet, representing approximately 22.3% of its total long-term
funding. Fitch considers these ratios high and a rating constraint
but analyzed the potential benefits the structure brings to the
transaction to allow some notching differentiation.
Coverage Levels Commensurate with Rating: When considering maximum
quarterly debt service and cash flows between October 2018 and
September 2023 from DRs, the projected quarterly minimum debt
service coverage ratio (DSCR) is expected to be approximately
90.6x, reflecting an increase from 76.3x at the time of the
previous rating action. The transaction would be able to withstand
a decline in flows of approximately 99% and still cover a maximum
P&I payment. Fitch will monitor the performance of the remittance
flows, as potential pressures could negatively affect the assigned
ratings.
Parent Provides Corporate Guaranty: Elektra has provided an
irrevocable and unconditional guarantee on a senior basis to the
collateral agent on behalf of investors, guaranteeing the full and
prompt payment of all payments when due by NEM under the
transaction documents. Given the unconditional and irrevocable
nature of the guarantee in place, the rating of the transaction
will always be the highest of either Elektra' ratings or the
ratings of NEM plus the notching differential allowed by the GCA
score.
Foreign Exchange Risk Mitigated by Excess Cash Flows: The
transaction is exposed to a two-day rolling devaluation risk as
remittance flows are paid in Mexican pesos by the DRs, although the
liabilities are U.S. dollar-denominated. This risk is mitigated by
significant excess coverage in cash flows to support Mexican peso
depreciation.
Transfer and Convertibility Risk Caps Transaction Rating: The
transaction is exposed to transfer and convertibility risks as
securitized remittance flows are paid into an account in pesos. To
partially mitigate operational risk that may arise from
transferring and converting flows on a daily basis to an off-shore
account, the transaction maintains a reserve fund that covers one
maximum P&I payment. This exposure caps the rating of the
transaction at Mexico's Country Ceiling of 'BBB+'.
RATING SENSITIVITIES
Factors that Could, Individually or Collectively, Lead to Negative
Rating Action/Downgrade
- The transaction ratings are sensitive to changes in the credit
quality of both Elektra and NEM. A deterioration of the credit
quality of Elektra or NEM is likely to trigger a negative rating
action;
- The transaction ratings are sensitive to the remittance business
line's performance and its ability to continue operating, as
reflected in the GCA score. A change in Fitch's view on the
company's GCA score that results in a lower GCA score would likely
trigger a negative rating action on the notes.
- The minimum expected quarterly DSCR is approximately 90.6x, and
should therefore be able to withstand a significant decline in cash
flows in the absence of other issues. However, significant declines
in flows could lead to a negative rating action. Any changes in
these variables will be analyzed in a rating committee to assess
the possible impact on the transaction ratings;
- No company is immune to the economic and political conditions of
its home country. Political risks and the potential for sovereign
interference may increase as a sovereign's rating is downgraded.
However, the underlying structure and transaction enhancements
mitigate these risks to a level consistent with the rating.
Factors that Could, Individually or Collectively, Lead to Positive
Rating Action/Upgrade
- The main constraint to the program rating is the originator, NEM.
Given the unconditional and irrevocable nature of the guaranty
provided by Elektra, NEM's parent, the rating of the transaction
will always be the highest of either Elektra's ratings or the
ratings of NEM plus the notching differential allowed by the GCA
score. Therefore, if there is a positive change in Fitch's view of
NEM's GCA score or a positive rating action on either Elektra or
NEM's ratings, a positive rating action could be triggered on the
notes.
USE OF THIRD PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G -10
Form ABS Due Diligence-15E was not provided to, or reviewed by,
Fitch in relation to this rating action.
PUBLIC RATINGS WITH CREDIT LINKAGE TO OTHER RATINGS
The future flow ratings are driven by the credit risk of NEM, as
measured by its Long-Term Local-Currency IDR.
ESG CONSIDERATIONS
The highest level of ESG credit relevance is a score of '3', unless
otherwise disclosed in this section. A score of '3' means ESG
issues are credit-neutral or have only a minimal credit impact on
the entity, either due to their nature or the way in which they are
being managed by the entity. Fitch's ESG Relevance Scores are not
inputs in the rating process; they are an observation on the
relevance and materiality of ESG factors in the rating decision.
=====================
P U E R T O R I C O
=====================
GRUPO HIMA: Seeks to Extend Plan Exclusivity to April 15
--------------------------------------------------------
Grupo Hima San Pablo, Inc., and its affiliates asked the U.S.
Bankruptcy Court for the District of Puerto Rico to extend their
exclusivity periods to file a plan of reorganization and obtain
acceptance thereof to April 15 and June 13, 2024, respectively.
This is the Debtors' third request for an extension of the
Exclusive Periods and comes almost five months after the Petition
Date. The Debtors have made significant strides forward thus far.
But, as would be expected given the scope of what must be achieved
in this chapter 11 case, much work remains.
The Debtors anticipate that the requested of a 30-day extension of
the Exclusive Periods will allow the Debtors sufficient time to
conclude its negotiations with the UCC and secured lender, file a
Disclosure Statement and Plan, and chart an exit course for these
cases.
The Debtors claim that they require additional time to negotiate a
Plan of Reorganization and prepare adequate information to allow a
creditor to determine whether to accept such Plan. As stated
before, upon the conclusion of ongoing day-to-day healthcare
operations of the estate, the Debtors are required to do some
final
reconciliations of the available funds, with their intent to
finalize the plan to be proposed to their creditors.
The Debtors explain that they are in some ultimate negotiations
with the DIP Lenders, pre-petition lenders and the UCC for this to
be possible. These negotiations entail a reconciliation of
administrative expenses and identifying sources of funds that could
be released by lenders to the estate for the payment of
administrative claims and provide for the formulation of a plan of
reorganization.
In addition to all other matters, Debtors have already identified
different professionals which could aid in implementing the
reorganization strategy to be proffered to creditors.
Further, the alternatives or strategies to be implemented have
required discussion and are being discussed with the secured
creditors and the UCC.
Accordingly, the Debtors are currently concluding the final
negotiations with the secured creditor and the UCC, which
ultimately will aid and dictate the contents of a plan. Currently,
this has been an ongoing process, and such work requires an
extension of the Debtors' Exclusive Periods.
Attorneys for the Debtor:
Wigberto Lugo Mender, Esq.
Alexis A. Betancourt Vincenty, Esq.
Lugo Mender Group, LLC
100 Carr. 165 Suite 501
Guaynabo, PR 00968-8052
Tel: (787) 707-0404
Fax: (787) 707-0412
Email: wlugo@lugomender.com
About Grupo Hima San Pablo
Grupo HIMA San Pablo, Inc. serves as a diversified healthcare
services holding company pursuant to a corporate reorganization of
several businesses related by common ownership. Through its
subsidiaries and affiliates, Grupo HIMA San Pablo primarily owns
and operates hospital facilities and other healthcare related
businesses. As of August 2023, the HIMA GROUP operates four
hospitals, with over 1,200 licensed beds, including an Oncological
Hospital, a multi-specialty physician practice management company,
Home Care Service (including infusion therapies and wound care), a
free-standing ambulatory center and a 16-ambulance service
company.
Grupo HIMA San Pablo and its affiliates filed Chapter 11 petitions
(Bankr. D. P.R. Lead Case No. 23-02510) on Aug. 15, 2023. In the
petition signed by its chief executive officer, Armando J.
Rodriguez-Benitez, Grupo HIMA San Pablo disclosed $500 million to
$1 billion in assets and $100 million to $500 million in
liabilities.
Judge Enrique S. Lamoutte Inclan oversees the cases.
Wigberto Lugo Mender, Esq., at Lugo Mender Group, LLC and
Pietrantoni Mendez & Alvarez, LLC serve as the Debtors' bankruptcy
counsel and special counsel, respectively.
The U.S. Trustee for Region 21 appointed an official committee of
unsecured creditors on Sept. 7, 2023. Porzio, Bromberg & Newman,
P.C. is the committee's legal counsel.
Edna Diaz De Jesus is the patient care ombudsman appointed in the
Debtors' Chapter 11 cases.
===============
S U R I N A M E
===============
SURINAME: IMF OKs Nonobservance Waiver of Performance Criterion
---------------------------------------------------------------
The Executive Board of the International Monetary Fund (IMF)
completed the fifth review under the Extended Fund Facility (EFF)
arrangement for Suriname and granted a waiver for nonobservance of
a performance criterion. The completion of the review allows the
authorities to draw the equivalent of SDR 46.7 million (about USD
62million), bringing total disbursement to SDR 243.7 million (about
USD 323million).
Suriname's EFF arrangement was approved by the Executive Board on
December 22, 2021 (see Press Release No. 21/400). Since then,
Suriname has been steadily implementing an ambitious economic
reform agenda aimed at restoring fiscal and debt sustainability
through fiscal consolidation and debt restructuring, protecting the
vulnerable by expanding social programs, upgrading the monetary and
exchange rate policy framework, addressing the financial sector's
vulnerabilities, and advancing the anti-corruption and governance
agenda.
Following the Executive Board discussion on Suriname, Mr. Kenji
Okamura, Deputy Managing Director, and Acting Chair, issued the
following statement:
"The authorities' commitment to fiscal discipline and macroeconomic
stabilization under the EFF-supported program is paying off. The
economy is growing, inflation is on a steady downward trend, and
investor confidence is improving. Near-term downside risks
highlight the importance of maintaining the reform momentum to
secure hard-won gains.
"The authorities' determination to carry out politically
challenging reforms is commendable. All quantitative performance
criteria for this review were met, and structural reforms are
proceeding, albeit with some delays.
"The near-term priority is to preserve fiscal discipline to put
public debt on a firmly downward path and build resilience to
future shocks. The authorities' commitment to removing unregistered
and chronically absent workers from the public payroll will help
create fiscal space for a more meaningful wage increase for
productive civil servants. Gradually phasing out electricity
subsidies will help finance higher social assistance spending and
channel more resources toward growth-enhancing investment. Ensuring
the efficient and effective allocation of social spending remains
paramount. Stronger commitment controls to prevent the accumulation
of supplier arrears is also a priority.
"Noteworthy progress has been made with debt restructuring.
Bilateral agreements with all official creditors have been
completed and the debt exchange with private external bondholders
has been finalized. Domestic debts to the central bank and
commercial banks have been restructured. The priority is to
promptly clear domestic debt arrears.
"Monetary policy is supporting disinflation. The authorities'
demonstrated commitment to flexible, market-determined exchange
rate is helping support accumulation of international reserves. The
recent approval of recapitalization plans of banks with capital
shortages and the governance framework for the state-owned banks
are important steps toward addressing banking sector
vulnerabilities. Prompt finalization of the central bank
recapitalization plan will help further strengthen its operational
independence and financial autonomy.
"The authorities should persevere with their ambitious structural
reform agenda to strengthen institutions, governance, and data
quality, including with continued capacity development support from
the Fund and other development partners."
=====================================
T R I N I D A D A N D T O B A G O
=====================================
TRINIDAD AND TOBAGO NGL: Delays Publishing Year-end Results
-----------------------------------------------------------
Joel Julien at Trinidad Express reports that for the second
consecutive year, Trinidad and Tobago NGL Ltd has announced a delay
in the release of its audited financial statements, citing ongoing
audit activities at Phoenix Park Gas Processors Ltd (PPGPL) as the
reason.
This announcement comes three months after TTNGL was ordered to pay
fines totaling $273,700 for violations of the country's securities
laws, according to Trinidad Express.
"Trinidad and Tobago NGL Ltd (TTNGL) advises of a delay in the
publication of its audited financial statements for the year ended
December 31, 2023 by the due date of March 30, 2024. This delay is
due to continuing audit work for TTNGL and its underlying asset,
Phoenix Park Gas Processors Ltd. TTNGL apologises for the delay and
anticipates publication of the financial statements by May 31,
2024," a notice to shareholders dated March 21 stated, the report
notes.
The report relays that the announcement of this delay mirrors the
announcement made by TTNGL on March 28 last year when it advised of
the postponement of the publication of the audited financial
statements for the year ended December 31, 2022.
On May 23, TTNGL also announced that the publication of its interim
financial statements for the quarter ended March 31 would also be
delayed, the report discloses. It stated that this delay was also
a result of the ongoing 2022 audit on PPGPL, the report notes.
On June 21, TTNGL advised that the publication of its audited
financial statement for the year ended December 31, 2022, and
interim financial statements for the quarter ended March 31, 2023,
would be further delayed, the report relays.
On August 15, TTNGL eventually posted its 2022 annual report, as
well as the audited financial statements for the year ended
December 31, 2022, and the interim financial statements for the
quarter ended March 31, the report says.
TTNGL was eventually fined $113,050 by the T&T Securities Exchange
Commission on December 19 for not posting its audited annual
comparative financial statements for the year ended December 31,
2022, within the prescribed timeframe, the report notes.
On that day, TTNGL was also fined $96,900 by the TTSEC for not
filing its annual report for the financial year ended December 31,
2022, in a timely manner, the report says.
On December 18, TTNGL was also fined $63,750 by the TTSEC for
filing its interim financial statement for the quarter ended March
31, 2023, late, the report adds.
The report notes that for the year ended December 31, 2022, TTNGL
recorded a total comprehensive loss of $402.6 million.
This was a turnaround from the total comprehensive income of $460
million for the year ended December 31, 2021, the report relays.
"The adjustments for decommissioning and amortisation of intangible
assets have resulted in restatement of the PPGPL financial
statements for 2020 and 2021 as per requirements of International
Financial Reporting Standards. This treatment had a flow-through
effect on TTNGL's reporting with similar restatement of its
financial statements, amendments to the Fair Value (FV) calculation
and recognition of impairment charges. Despite the foregoing, TTNGL
showed strong operating performance for 2022, recording profit
after tax (excluding impairment charges) of $165.8 million,
compared to $192.3 million for 2021," TTNGL chairman Dr Joseph
Ishmael Khan said in his statement on the December 31, 2022
results, the report discloses.
"The aforementioned impairment charge amounted to $562.4 million in
2022 compared to a reversal of $267.2 million (restated) for 2021.
The primary cause of the impairment charge emanated from the 2022
FV assessment of TTNGL's investment in PPGPL. The Fair Value Less
Costs of Disposal (FVLCD) calculation utilised management estimates
for expected future cash flows from the asset based on assumptions
around a more conservative scenario that included:
i. Lower forecasted cash flows from the North American assets, as
the company rationalises the income from these operations.
ii. Inclusion, for the first time, of decommissioning cash flows
related to PPGPL's plant located at Point Lisas, Trinidad.
iii. Adjustments to align the impact of terminal cash flows for
PPGPL's Point Lisas operations to match the decommissioning
provision timeframe of 2042," Khan stated.
For the nine months ended 30 September 2023, the last time TTNGL
posted its financials it recorded an after-tax profit of $32.7
million, the report relays.
This was a $132.4 million decrease when compared to the comparable
period in 2022, the report adds.
*********
S U B S C R I P T I O N I N F O R M A T I O N
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