Trinidad refuses to buy indebted steel company
The Trinidad and Tobago government says it will not purchase debt-ridden ArcelorMittal Point Lisas, a local subsidiary of the world's leading steel and mining company.
Finance Minister Colm Imbert said ArcelorMittal, which has been losing money since 2008, is in the process of winding up the company in accordance with the Companies Act and the next step would be to advertise that resolution, appoint a liquidator, meet with creditors and dissolve the company.
"If the government were to take on this liability now, we would have to absorb TT$3 billion in debt. It doesn't appear that it makes sense for the government to purchase the plant at this time; reason being the huge debt levels and also the absence of a market for the product," said Imbert.
The finance minister, who met with the steel plant workers' union and with company representatives, said the workers expressed concern over their severance benefits and pension payments.
However, he said ArcelorMittal was under no legal obligation to pay its workers severance benefits as it is seeking to voluntarily wind up its operations, rather than retrench its workers.
"Legally, right now, they can avoid the severance benefit liability by dissolving the company, which I assume is why they are doing what they are doing," Imbert said. He said he was told by ArcelorMittal that the steel workers "would have been entitled to" about US$30 million if they had been laid off.
Under voluntary liquidation "What would happen is that the assets would just be sold to meet outstanding liabilities and severance benefits would not be one of those liabilities, according to the law," Imbert added.
The minister said ArcelorMittal has signalled that it is weighing whether it can afford to pay workers from proceeds of the sale of assets said to be worth about US$80 million.
"That is not in writing and it is not a legal obligation on their part," said Imbert, adding that he "certainly hoped that if it came to this and they are able to realise the amount of money they think they would, that they use the funds to pay their workers".
He said the company told him that its indebtedness was now about US$450 million (TT$2.97 billion). The debt is nearly sixfold the assets of US$80 million (TT$528 million), incorporating the plant, equipment and inventory.