Regional banks among targets for $30B GuySuCo financing

…as negotiations continue to secure funding

The $30 billion financing which the National Industrial and Commercial Investments Limited (NICIL) is seeking to continue operations at the Guyana Sugar Corporation (GuySuCo) is expected to come from sources that include regional banks.
This is according to sources close to NICIL. However, when contacted, NICIL’s Public Relations Consultant, Alex Graham, noted that it was still too early to say exactly from where the funds would be garnered. He noted that negotiations are ongoing in this regard.

“Some might be loans, some might be investments… The negotiations and discussions (are) now being conducted with a variety of banks and financial institutions. More than likely it won’t come from one (source),” he disclosed.
It has recently emerged that NICIL’s Special Purpose Unit (SPU) was seeking some $30 billion in loans and investments to support its new ward — GuySuCo. It has also been related that this funding would cover a four-year period, and will provide capital and support infrastructure maintenance and upgrades at Albion, Blairmont and Uitvlugt. The funds are also expected to go towards developing new co-generation capacity for the estates’ operations and the national electricity grid.
GuySuCo has a history of debt; at the end of 2015, the corporation owed $78.6 billion. As at January last year, that debt showed a marginal decrease to $77 billion. GuySuCo owes money to the National Insurance Scheme (NIS), the Guyana Revenue Authority, the Caribbean Development Bank (CDB) and other entities.
One of NICIL’s first acts since assuming responsibility for GuySuCo has also been to abruptly end the life of the old Board of Directors. Coming out of a special board meeting, a decision was taken to have a new board installed as of February 14.
The NICIL Board has also handed down instructions to GuySuCo to freeze all hiring. According to NICIL’s Public Relations Consultant Alex Graham, instructions have also been handed down to not renew any employee contract that is in the process of expiring.

DDL
The Demerara Distillers Limited (DDL) had, in January, submitted an Expression of Interest (EoI) for the purchase of one of the estates. This was even as the SPU was seeking interested buyers for the Skeldon and Enmore estates.
DDL, which produces the international award-winning El Dorado Rum, has raised concerns over Government’s plans to downsize the sugar sector. The company heavily depends on molasses for its production.
It is understood that both the unit and DDL have been exploring the possibility of the company investing in the current crop at Enmore through advance payments on the molasses. Talks are also ongoing for DDL to participate in the management of the estate.
The unit had expressed in a press release that PricewaterhouseCoopers (PwC), which has been blacklisted in India, has been evaluating GuySuCo’s assets and had raised concerns about the need to have the estates seen as “fully functioning operations and facilities”.
This, it is understood, is because the company felt that closed estates would not attract the best of investors and prices. According to the unit, if approved by the NICIL Board, the DDL deal would allow the SPU to meet PwC’s recommendations.
Government had moved to close the Enmore and Rose Hall sugar estates, as well as sell the Skeldon Sugar Factory. Government’s explanation for downsizing the industry has always been a need to cut costs.