PPP questions secrecy on remaining $15B GuySuCo bond

– says few details forthcoming from NICIL on future use

Lack of detailed information on the status of the remaining $15 billion from the bond raised by the National Industrial and Commercial Investments Limited (NICIL) has prompted concerns from the parliamentary Opposition.
At his press conference on Thursday, People’s Progressive Party General Secretary Bharrat Jagdeo questioned what was being done with the money. This money, he reminded, would have to be repaid with interest.
“What is happening to the remaining $15 billion that has been sitting in the account of a long while now since it has been raised… What is it being used for?” Jagdeo,

the Opposition Leader, questioned.
“We have not seen any statement from NICIL regarding the future uses, bearing in mind that we are paying interest on this large sum of money that was borrowed and is just sitting in an account.”
After reports in sections of the media that no money was disbursed to the Guyana Sugar Corporation (GuySuCo), NICIL’s Special Purpose Unit said in a statement on Sunday that some $2 billion was disbursed to the Corporation.
It was added that the monies from the bond facility will be used to purchase equipment for production of plantation white sugar, including the purchase of nine tractors, and to address the co-generation plants’ operational expenses.
“The monies obtained from the bond facility were not obtained to facilitate the payment of debt, as was ventilated time and again by the Minister of Finance and stakeholders,” the SPU said.
It was pointed out that GuySuCo is yet to complete its procurement process for the mentioned capital items. Therefore, SPU has said, GuySuCo is not in a position to draw down on additional secured funds.
Earlier this year, NICIL was mandated to seek financing for the downsized Corporation, targeting retooling, diversification and improved agriculture. This was being pursued even as work was being done to privatise and divest the four estates – Skeldon, Rose Hall, Enmore and Wales.
Through local financing arranged by Republic Bank Limited, NICIL has managed to successfully negotiate a bond facility for $30 billion, with significant input from

the Finance Ministry.
NICIL has requested $17 billion in the first tranche. “We will receive the remainder on request. It was structured in this manner for it not to incur unnecessary costs,” the statement added.
GuySuCo must submit its applications for financing to the SPU, and those are to be vetted to make sure they meet the approved criteria of the bond holders before financing is disbursed. Two disbursements have thus far been made; one for $880 million and another for $1.1 billion.
The SPU has said it must be noted that half of the bond amount would be provided for in local currency, while the remainder would be disbursed in United States dollars (USD).
With support from Government by means of a sovereign guarantee, SPU Head, Colvin Heath-London has been able to secure this funding spoken about.
The benefit is a 4.75 per cent rate of return, which represents a tax-free bond. NICIL, through its SPU, took control of the Skeldon, Rose Hall, Enmore and Wales estates when Government decided to close operations earlier this year in order to maintain the viability of the sugar industry.