The recent disbursement of $250 million to the Guyana Sugar Corporation (GuySuCo) by the National Industrial and Commercial Investments Limited (NICIL) under the $30 billion syndicated bond for the industry will be used mainly to pay its creditors and allow the corporation to honour its weekly wages payroll.
A source from the corporation told this newspaper that the disbursement will assist the company to pay its transportation contractors, purchase fuel, some materials for maintenance at factories during the out of crop period, in addition to meeting the wages payroll and other expenses.
However, it was disclosed that GuySuCo would still require additional money to meet its July monthly payroll and be able to effectively prepare for the second crop season that is scheduled to start later this month.
When NICIL deposited the money to GuySuCo’s account, it had said that in the “very near future” it will make available a further disbursement of $750,000,000. NICIL had 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.”
The source, being aware of NICIL’s condition under which the remainder of the money can be released, said the sugar-producing corporation cannot continue to operate like this as it requires a steady flow of cash to keep the industry going.
It was pointed out that being given the money in parts does not allow GuySuCo to fully execute its maintenance at factories and fulfill other obligations.
NICIL released the partial sum to GuySuCo following a report in this newspaper stating that the corporation was on the verge of beginning layoffs, as promised funding from the government via NICIL had not materialised.
“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 had told Stabroek News.
NICIL 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 corporation that it should instead “seek to resolve its financial challenges through professional engagements with NICIL and by extension the Government.”
The two have been at loggerheads for months over the $30 billion bond and control of the corporation’s assets.
GuySuCo had 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 Guyana Agricultural and General Workers Union (GAWU) had said GuySuCo will need approximately $1 billion if it is going to keep its doors open.
GuySuCo over the years has been facing a financial crisis and back in 2015, at the time of the change of government, the company had announced that it was in need of a bailout.
Chairman of the Board of Directors John Dow had written to the president seeking an urgent bailout to alleviate the crisis the corporation is in.
The union stated that in a letter dated May 15, Dow appealed to President David Granger “… to use your good offices to arrange for funding to prevent the impending closure of the Industry.” In the letter he also said that GuySuCo needs funds now to be able to survive after the second week of June 2020.
With a backlog of $2.1 billion owed to creditors, Dow said creditors are unlikely continue to grant further credit.
Dow had told the President that the current estates – Albion, Blairmont and Uitvlugt – in 2015 were in dire need of upgrades and that considerable sums of money were required to fix the deteriorated infrastructure in the field, in particular, bridges, dams, revetment repairs, and to provide for replacement equipment in field tractors, drain-digging equipment etc and factory pumps, motors etc. He explained that considerable sums were, and still are, required as a result of the neglect to provide the routine capital required for many years prior to 2015.
