Neal and Massy racks up losses on Shell investment
Published:Friday | January 7, 2011 | 12:00 AM
Cool Petroleum seeking new partners
The Trinidadian conglomerate Neal & Massy Holdings says that it has written off its investment in Joey Issa's Cool Petroleum Ltd and that Cool is a looking for a new equity partner to pump cash into the business that has failed to return a profit over the past two years.
However, the spokeswoman for Neal & Massy said the group had not yet made a decision on whether it will withdraw from Cool altogether.
"We can't discuss the transaction," Neal and Massy's group communications officer, Candace Ali, told the Financial Gleaner by telephone from Port-of-Spain.
"A decision has not been made."
Ali also suggested that Issa might be courting other investors, but declined to elaborate.
She said the Financial Gleaner should turn directly to "Mr Joey Issa for further clarification".
But neither Issa nor Cool's CEO, Rodney Davis, returned phone calls or responded to emails for comment on the issue.
Neal & Massy's clear unease with its investment in Cool, and the hint that it could withdraw from the venture, is contained in the report by the group's chief financial officer Paula Rajkumarsingh, published alongside the conglomerate's financial results for 2010.
Rajkumarsingh raised the issue of Cool Petroleum in the context of the write-off of another and its disposal for TT$1—a loss-making Bahaminan supermarket chain it inherited with the acquisition of Barbados Shipping and Trading.
"The Cool Petroleum Ltd investment was also written off as the company is seeking another equity partner," Rajkumarsingh said.
In the last financial year ending September 2010, Neal & Massy posted a loss of TT$7.3 million on its Cool Petroleum operations, which, on the face of it, would represent its portion of losses by the Jamaican petroleum marketer and retailer.
In 2009, Neal & Massy booked a TT$11.6-million loss on Cool.
Cool Petroleum was formed in 2005 when Issa, who then operated a gas stations under the Cool Oasis brand, cobbled a deal with Neal & Massy to take over the Jamaica petroleum-market operations of Shell oil company, which was pulling out of most Caribbean countries.
Although Neal & Massy took only a 40 per cent stake in the gasolene and lubricants marketing business, it took full ownership of the Shell's liquified petroleum gas operation. The product is distributed in Jamaica under the GasPro brand by Gas Products Limited, a 100 per cent subsidiary of Neal & Massy.
Neal and Massy reported an 18 per cent decline in net profit to TT$424 million at the end of September, down from TT$517 million in the previous year.
Revenues remained flat at TT$8.3 billion.