The Guyana Sugar Corporation (GuySuCo) has a new lease on its financial life after receiving a disbursement of a quarter of a billion dollars from the National Industrial and Commercial Investments Limited (NICIL) under the $30b syndicated bond for the industry.
The announcement from NICIL with barbs at GuySuCo drew a scathing response from the corporation yesterday.
In a release yesterday, NICIL stated that it has credited GuySuCo’s account with $250,000,000 which sum represents “a partial response” from the Agency to the Corporation’s request to the government for a bailout.
According to NICIL, this payment brings the total disbursements to GuySuCo from July 2018 to date to $9,970,759,568; in addition to the close to $40 billion it has received from the government.
The Agency chided GuySuCo for what it refers to as “resorting to petty disclosures and half-truths in the press, none of which are providing the solutions to its myriad of problems.” It told the Corpora-tion that it should instead “seek to resolve its financial challenges through professional engagements with NICIL and by extension the Government.”
NICIL also “strongly” advised GuySuCo to obey the terms and conditions of the bond and to seek to ensure compliance with same, and also, that it honours the reporting of its expenditure schedule to NICIL and the bond holders.
The Agency disclosed that in the “very near future” it will make available to GuySuCo, a further disbursement of $750,000,000. It however cautioned that this can only be possible “when NICIL and GuySuCo can engage in solutions-driven discussions about making Guysuco a commercially viable entity.”
NICIL assured that it is looking forward to such discussions and reiterated its commitment to protecting the livelihood of GuySuCo’s employees and the sugar industry, the release added.
Yesterday’s Stabroek News reported that GuySuCo was on the verge of beginning layoffs as promised funding from the government via NICIL had not materialized.
“We have not received any money yet from the government. We do not have an understanding of what is happening but it seems as if there is some undermining by authorities at the Ministry of Finance or at (government holding company) NICIL to get the money into the bank,” a source said.
It was explained that while GuySuCo was able to meet its monthly payroll obligation for June, the corporation was not in a position to do so for July and would not be able to meet its wages requirement for this week.
Prior to the NICIL release, the main sugar union GAWU said in a statement yesterday that it was “most disturbed after it learnt from a report appearing in the July 01, 2020 Stabroek News that there appears to be active consideration to bring the operations of GuySuCo to a halt and as a consequence lay off thousands of workers. Our Union has dispatched a letter to the Corporation’s CEO, Dr Harold Davis (junior) seeking clarification on the report appearing in the media. We are obviously very concerned and alarmed by the possible developments and seek to hear from the GuySuCo”.
Last evening GuySuCo issued a press release blasting NICIL. The two have been at loggerheads for months over the $30b bond and control of the corporation’s assets.
GuySuCo said it was perturbed that NICIL had arrogated onto itself, the responsibility of managing the Corporation.
“The corporation wishes to inform NICIL that its managers are in no way abdicating their responsibilities to the holding company – neither for its operations nor that of the wellbeing of its employees. The managers of GuySuCo have a fiduciary responsibility which they intend to carry out.
The Corporation wishes to state that from the very beginning, GuySuCo and its managers have had a solution-oriented approach to the transitioning of the sugar industry; however, sadly these good intentions; became derailed by NICIL’s ambitions, which have now placed the corporation and its employees in the ‘cash-strapped’ position it is in”, GuySuCo charged.
The Corporation said it has noticed that NICIL has launched a public awareness campaign promoting its success in implementing a number of projects which are the intellectual property of GuySuCo and its managers.
“It should also be noted that this is being done without any consultation or reference to these being the ideas of GuySuCo. Further, these projects are based on strategic company documents developed by current and former managers of GuySuCo, on the new direction relative to diversification and divestment of aspects of the company in order to ensure survivability of the remaining three estates – Uitvlugt, Blairmont and Albion. Additionally, when these company documents were provided to the Special Purpose Unit (SPU) of NICIL, it was solely for the purpose of overseeing the divestment and possible diversification of GuySuCo’s four estates – Wales, Enmore, Rose Hall and Skeldon, with the understanding that the proceeds will be given to GuySuCo to be reinvested into the three remaining estates.
“GuySuCo wishes (to) state that while the company’s documents and intellectual property were handed over to the NICIL/SPU the purpose of overseeing the divestment and diversification of the four estates, in January of 2018, the Corporation learnt that some of these documents were used to transfer the ownership of Wales, Enmore, Rose Hall and Skeldon Estates and other company property, to NICIL without GuySuCo’s knowledge”, the corporation charged.
Sequencing
It said that later in 2018, the Corporation learnt that NICIL/SPU had applied to a commercial bank and had successfully acquired a $30B Bond by using the strategic plans developed by GuySuCo without any consultation with the Corporation as to the sequencing for the Bond arrangement.
“The Corporation would like to state that NICIL/SPU brought no new thinking to the transition process of GuySuCo and the sugar industry since the strategic plans or business plans that was used by NICIL and submitted to the commercial bank for the G$30B Bond, was developed by a group of managers from GuySuCo as a part of a task force that was led by the current Chairman of GuySuCo, Mr. John Dow under the leadership of Mr. Errol Hanoman. The diversification plan, inclusive of the rice project at Wales Estate, for which NICIL now takes the credit, was also developed by a group of managers as a part of another task force that was led by former Skeldon Estate Manager, Karamchand Bramdeo for the reorganization of GuySuCo”, the corporation declared.
The Corporation further said that the current Chairman of GuySuCo was the author of the strategic plan that was submitted to the bank for the $30b Bond; and had he or GuySuCo been consulted, the Bond arrangement would have had more relevance now. GuySuCo said that it has already proposed that the Bond arrangement be revisited and aligned with the phases of its business plan.
GuySuCo also said that the strategic plans being used by NICIL in its tourism, rice production, and sale of lands programme are all the intellectual property of GuySuCo and its managers.
“The farmers who were given lands from NICIL at the Wales Estate for farming, was based on GuySuCo’s ‘Sustainable and Resilient Communities Programme’ (S&RCP). GuySuCo has trained more than one hundred and fifty persons in various areas of farming, and approached NICIL for lands from its own estate at Wales, to give to those persons who were trained; and NICIL/SPU has refused to give the lands; but are now distributing lands to persons in the community for farming”, the corporation asserted.
GuySuCo said that NICIL must also be reminded that the Wales, Enmore, Rosehall and Skeldon Estates were vested to the holding company without a penny being paid to GuySuCo.
“If NICIL should pay GuySuCo for at least the 4,600 acres of freehold lands which the Corporation had valued at $80B…the Corporation will also agree for NICIL to deduct the $9,970,759,568 that was disbursed from the Bond and the remainder could be disbursed into a Trust Fund for GuySuCo to carry out its recapitalization programme, pay its creditors and address operating expenses”, the corporation declared.
It added that while NICIL vested the assets from Wales, Enmore, Rosehall and Skeldon Estates, all of the liabilities for those estates still remain on GuySuCo accounting records. It said that if NICIL can take over these liabilities which include ex-gratia pensioners and bank loans, this will definitely pave the way for the Corporation to become a commercially viable entity.
GuySuCo also requested that NICIL provide the Corporation with copies of the Valuations for Wales, Enmore, Rosehall and Skeldon Estates for 2017 since its external auditors are awaiting same to close off the 2017, 2018 and 2019 audits for GuySuCo.
