Dear Editor,
Finance Minister Winston Jordan has pawned the remaining working assets belonging to the Guyana Sugar Corporation for $30 billion; and while the promise is to keep the industry open, this is not the case.
The announcement by Government that it had found $30 billion to invest in the Albion, Blairmont and Uitvlugt estates cannot be taken at face value, since this is a $30 billion loan on top of the more than $80 billion the company is claimed to already owe.
I wish to draw a quick reference to the adage, ‘all that glitters is not gold.’ The Granger Administration, this past week, announced that it had secured $30 billion to be invested in the remaining three estates in order to return them to profitability.
The devil is in the details. What the Special Purpose Unit (SPU) has in fact secured is a pawnbroker in the form of Republic Bank.
The loan for the sugar industry is what we call a syndicated loan. What this means is that Republic Bank has agreed to manage a loan portfolio as against lending GuySuCO its customers’ money.
The bank is not lending GuySuCo anything. What the bank has found is a set of persons who are going to put in some money, to be repaid within a short space of time.
A school child would be able to tell that the sugar industry is facing financial difficulties as is, and so pawning off all of its assets in hopes that one bright idea would be forthcoming out of Congress Place is in itself a not-so-bright idea.
A syndicated loan is one wherein the bank finds persons or companies with money willing to be put into a venture, and the bank in turn ensures that the syndicated loan is repaid as a priority out of any revenue stream.
What this will mean for GuySuCo—a company already struggling to pay its basic bills—is that it will soon begin to default on those loans.
There is no doubt the bank will ensure that such a risky transaction is insulated as best as possible, and this would mean Government guarantees and high interest rates.
Is the sailor Minister Jordan making a bad situation worse, or have we caught wind of skullduggery at epic proportions? The announcement came at a time when the national gaze is on the oil and gas industry. I predict that, in the very near future, the sugar company will begin to default on its payments to Republic Bank, since there is only so much cost cutting you can do before having to actually shut down. You have already sent home thousands of workers and closed a number of estates. Without a comprehensive strategy for the industry, the David Granger Administration has now pawned out the only three remaining sugar estates, and when the company is unable to repay on its loan, Republic Bank will take the assets and sell them off as scrap in order to pay off the loan, ‘end of story.’
This obtains even as the Government continues to sell out large plots of GuySuCo cane lands, and instead of investing the earnings into saving the industry, the PNC government has laid its cards on the table: not only will the industry be closed, but the factories will be sold as scrap metal.
You remember what happened to the thousands of sugar workers who were fired in January this year? They are still to be provided with some form of alternative source of income or employment.
What is going is like a fire-sale of GuySuCo, and what’s left abandoned will simply be sold as scrap metal — the end of a long and proud era of modern Guyanese history.
Sincerely,
Dr Peter Ramsaroop
