Home' Trinidad and Tobago Guardian : August 17th 2014 Contents SBG14 FEEDBACK
SUNDAY BUSINESS GUARDIAN www.guardian.co.tt AUGUST 17 • 2014
In the August 3 edition of the Sunday
BG, our stock analyst Felix Pereira
wrote a commentary headlined "Results
from TSTT and Tringen squeeze NEL s
performance," which the chairman of
Tringen, Carl Chatoor had some issues
Following is Carl Chatoor s letter:
As chairman of Tringen, I
consider it necessary to point
out that the paragraph in the
third column: "Tringen s
profitability was negatively
impacted by lower ammonia
prices on the world markets. In addition, it
suffered from gas curtailment issues during
2013. Significantly, it has an immediate need
in 2014 to finance an energy efficient improve-
ment project at its Plant 1."
The article further stated: "These factors
reduced its ability to make dividends to NEL;
these distributions were cut to $115 million
from $213.3 million previously" has sent con-
fusing signals to the shareholders and the
public in general.
As chairman, I took every opportunity since
2011 and every year thereafter to advise that
dividends in 2012, 2013 and 2014 would be
reduced as we had taken a policy decision to
internally fund the "energy efficient improve-
ment project at the Tringen 1 Plant" for com-
pletion in October 2014. The benefits of the
improvement project were:
• A reduction in gas consumption of 11
per cent per metric tonne (MT) of ammonia
• An increase in the production of ammonia
of approximately 80 metric tonnes per day
• An increase of income before taxes of
TT$92.8 million per year based on current
• Tringen I is now 34 years old and this
upgrade, together with other reliability invest-
ments, will extend the life of the plant by at
least a further 10 years
• Shareholders value will be enhanced.
We refer you to the Guardian s own article
of May 17, 2014 which clearly states: "Chatoor
advised shareholders that dividends for 2012,
2013 and 2014 would be reduced as Tringen s
Plant Energy Efficiency Improvement Project
(EEIP), which is budgeted to cost US$66.5
million, will be funded internally."
National Enterprises Ltd (NEL) was fully
advised in writing by February each year the
proposed dividend to be paid by Tringen.
For the article to say that Tringen had an
"immediate need to finance an energy effi-
cient improvement project (EEIP) at its Plant
1" as well as an infectious headline "Results
from TSTT and Tringen squeeze NEL s per-
formance" is nothing short of a gross mis-
representation of the published facts and this
can be interpreted as negligence of the oper-
ations and financial management of the com-
It attempts to convey to all concerned that
there was no planning of such an extensive
project. This project was approved in 2011
after two years of diligent research accom-
panied by a feasibility study. This was imme-
diately communicated to the shareholders in
the chairman s report of the fiscal year 2011.
The chairman s report, together with the
audited financial statements for 2013, took
great pains to specify where the shortfalls in
With all the information in the public
domain, as chairman with clearly defined
fiduciary duties, your article was of a great
disservice to Tringen s board and management
especially when Tringen has maintained a
healthy level of dividend payments to the
shareholders for the last five years with an
average annual dividend payment of TT$410
May I suggest that you review Tringen s
published accounts for the years 2011, 2012
Tringen looks forward to the retraction of
the article or parts thereof and an unam-
biguous clarification in the next available
edition of the Sunday BG.
Tringen a viable entity
Mr Carl Chatoor, chairman of Tringen, provided some interesting
feedback on my article on NEL, which was published on August 3,
Mr Chatoor was concerned that the headline, "Results from TSTT
and Tringen squeeze NEL s performance" was too infectious. This
headline merely reflected the reality of NEL s lower dividend receipts;
it made no judgment about Tringen s generally robust performance
over the years.
However, one could appreciate that, coming so close to TSTT in
the heading, a reader, knowing about the poor performance of TSTT,
may be inclined to assume that Tringen s performance was also
lacklustre (simply because its dividend was lower).
In general, Mr Chatoor was concerned that some statements in the
article were not too favourable to Tringen.
If it were a direct publicly-listed company, Tringen might have
placed greater emphasis on shareholder returns and perceptions. With
that in mind, it might have decided not to totally fund this costly
multiyear project internally and would have considered a more balanced
approach to its financing.
Generally, public shareholders prefer to receive dividends that are
regular and rise slowly over time. For example, dividends of $1.00,
$1.10 and $1.25 are preferable to $1.00, $1.50 and $0.85.
Although the total payment over three years is the same $3.35, the
variability of the second option is often unnerving to many shareholders
and tends to create greater volatility in the movements of the share
This is one of the reasons why investors "chase after" shares like
Witco and UCL. Until recently, SBTT was part of that elite group.
With this consideration in mind, it might have been more feasible
for Tringen to make judicious use of some debt, interest on which
is tax-deductible, to better manage its outflows to both shareholders
(NEL) and capital expenditures.
Generally, an investor makes use of multiple sources of information
before making investment decisions and one, allegedly "not so friendly"
report, is probably insufficient to sway a decision one way or the
Tringen is a joint venture (JV) between
the Government of T&T (51 per cent) as
the "A" Shareholder and Yara International
ASA (49 per cent) as the "B" Shareholder.
The joint venture consists of two plants
viz, Tringen 1 and Tringen 11.
Yara Trinidad Ltd is the manager/opera-
tor of Tringen and has operational and fi-
nancial authority to manage and operate
the plants as per shareholder and man-
agement and operating agreements under
the direction and guidance of the board of
directors of Tringen.
The Tringen's board consists of six
members, three of whom are appointed by
the government as the "A" shareholder (51
per cent) and three by Yara International
ASA as the "B" shareholder (49 per cent).
The chairman of Tringen is appointed by
the "A" shareholder and is one of its three
The government shareholding (51 per
cent) is assigned to National Enterprises
Ltd and all dividends are paid directly to
NEL. Tringen has a direct financial report-
ing relationship to Ministry of Finance and
a direct operational relationship with Min-
istry of Energy and Energy Affairs.
It is also to be noted that government
owns 66 per cent of NEL shares, NGC has
17 per cent and the remaining 17 per cent
is traded to the public. Therefore, apart
from the "A" and "B" Shareholders, Tringen
has an indirect duty responsibility to the
shareholders of NEL.
It is with this complex network of re-
porting relationships as well as sharehold-
ers, the Board of Tringen is particular and
very determined to ensure accurate infor-
mation is released in the public domain.
It is for this reason that the chairman's
response to the article published had "col-
lective review" by the directors of both "A"
and "B" shareholders as well as the man-
agement of both Tringen and Yara. There
was unanimous agreement by all that any
information in the public domain that may
or is likely to create any doubt or form dif-
fering opinions/interpretations be clarified.
Felix Pereira responds...
Sudama: I am not a
I write to comment on the article published
in your Business Guardian of Week One, August
2014 which highlighted my appointment to the
board of directors of the Central Bank of T&T.
The headline seems to be obsessed with my
age rather than my background and suitability
or lack thereof for the position. After all, I am
not deemed to be infirm of mind. I receive a
pension from the State for parliamentary services
rendered. I am at a loss as to how that makes
me a "political pensioner," whatever that term
There are, however, some blatant inaccuracies
and certain information which never came from
me. First of all, I was the UNC s Minister of
Agriculture only for the period 1999-2000.
From 1995-1999 I served as Minister of Planning
Secondly, I never attended UWI as a student
and certainly not in the 1950s when, up to 1955,
I was still a student at secondary school. My
first degree was from the University of Durham
in England and subsequent enrolments were
at Carleton University, Queen s University and
the University of Toronto in Canada.
The reflection on the standard of journalism
hardly needs to be emphasised.
Links Archive August 16th 2014 Remembering World Wars 1-2 Navigation Previous Page Next Page