Even as it complains that the Guyana Sugar Corporation (GuySuCo) is not accounting for monies provided through the $30b bond acquired for the industry, the Special Purpose Unit (SPU) has said it will continue to fund the company.
“Our intention is to continue funding GuySuCo based on requests as long as requests are in keeping with obligations we signed with the trustee’s and bond holders.” SPU head Colvin Heath-London told a press conference at in NICIL’s boardroom yesterday.
According to the bond agreement funds are to be used from the bond facility to purchase equipment for plantation white sugar and co-generation plants and operational expenses, including the purchase of nine tractors. The bond can also be used to facilitate “operational expenses” including wages and salaries.
According to Heath-London, the SPU has through 9 disbursements transferred a total of $7,420,759,568 to GuySuCo but the company has not provided an accounting “in the detail required by the bond holders”. They have also paid $783,750,000 in interest as of May 22, 2019.
He explained that the sums were requested based on the broad heading of “various operational needs” but the SPU has not received confirmation of what the money has been used for which places NICIL in a difficult situation.
Attempts by Stabroek News to reach Audreyanna Thomas, the Public Relations Officer of GuySuCo proved futile.
“The bond holders and trustees are not happy with information coming from NICIL. As part of the arrangement we are supposed to provide the bond holders evidence of what proceeds are used for. We have not been able to do that to date. GuySuCo is still to provide that information,” Heath-London explained adding that the SPU is “still operating on good faith in relation to funding GuySuCo as a going concern.”
He stressed that as part of its mandate the SPU was asked to fund GuySuCo and secured the bond using NICIL’s asset pool which includes more than 15 difference government agencies.
”In no way shape or form is the bond backed by GuySuCo assets. It’s a purely NICIL bond and what happens if we default on this is it will be NICIL’s assets and subsidiaries that will suffer,” Heath-London lamented.
The bond holders he indicated can decide to levy against NICIL’s assets.
“If we continue we are pushing NICIL and by extension government into default. We have been written (to) and chided by bond holders and trustees to this effect and are working to bring the standoff to an end,” he stressed before lamenting that the standoff can have far reaching effects.
“It affects Guyana’s financial creditability on the regional and international market. A lot of financial institutions are plugged in to how Guyana is operating under this bond. Whenever we may go into the financial space again they may treat us based on how they perceive we operated with this bond. It has far reaching effects. It affects future funding of projects in Guyana,” he bemoaned.
Despite these concerns and the acknowledgment that providing GuySuCo with more money under these conditions “is not in keeping with financial best practices” it is likely that payouts will continue.
A $1 billion request is presently in the system.
