Guyana Stock Feeds Inc
…matter for Cabinet discussion
Government, through the National Industrial and Commercial Investments Limited (NICIL), had made moves to sell its shares in the Guyana Stock Feeds Incorporated (GSFI), but weeks after initiating this move, a snag has been encountered and the situation will have to be addressed at the Cabinet level.
During an interview with this publication, NICIL CEO, Horace James, explained that although holding seven per cent shares in the GSFI, Government was not being given a substantial role in determining the direction of the company.
“The status of that (attempt to sell the shares) is: We only had one person submit a bid, and we are going back to Cabinet for further direction. At next Tuesday’s Cabinet meeting, they should have time to consider that; so, next week, I expect to have a Cabinet position,” he declared.
“So we have no influence or any seat on any board, or any director (representing our interests). All we could have done was: when dividends (are) offered, collect dividends. I don’t think that is the role of a Government in a private (company),” he expanded.
In a notice originating from NICIL, bids to purchase the Government’s shares in GSFI were invited from reputable organisations. It is understood that NICIL holds 6.68 per cent of the total shareholding of the company, with the other shareholders retaining 93.32 per cent. Bidders interested in purchasing the NICIL shares must, however, first register with NICIL and pay a $10,000 registration fee. They would then be provided with a Request for Proposals (RFP) document; a Memorandum with company details; guidelines for bidders; and a draft Share Sales Agreement.
Cautioning that it was “not bound to accept any proposal” for the purchase of its shares, NICIL had also issued a stipulation that these proposals must be submitted by December 7, 2017.
The GSFI was established in 1960 with the main purpose of supplying animal feed to Guyana’s livestock sector. In 1975, the then Government had nationalised the GSFI, and thus it stayed until 1998, when it was put back into private hands. At the time, the state had brought in a strategic partner to reorganise the business, which was losing market share to imported feeds. Today, the GSFI is a conglomerate with interest in the livestock, rice, and edible oil sectors. The enterprise itself is located in an industrial park at Farm, East Bank Demerara.
As a shareholder of the GSFI, NICIL has not enjoyed a smooth ride per se. There have, over the years, been repeated clashes with principal shareholder and Pegasus owner Robert Badal — a financier of the Alliance for Change (AFC) political party, minority partner in the coalition APNU-AFC Government. NICIL once took the GSFI to court and obtained an injunction against the enterprise.
This is the latest in a series of moves by NICIL to free the Government of involvement in certain enterprises. The most famous example is the divestment taking place at GuySuCo under the auspices of a Special Purpose Unit (SPU).
The Unit has begun the process of selling the GuySuCo’s assets, including a number of estates. It has been soliciting proposals from companies or persons, either individually or as part of a joint venture or consortium “with an interest in the privatisation and/or diversification of Skeldon, Rose Hall, Wales and East Demerara ‘Enmore’ factories.”
The request by the SPU for expressions of interest has been identified as the first step in the process of finding and shortlisting buyers or investors in regard to the assets of GuySuCo. The SPU has also already identified a firm — PriceWaterhouse Coopers — to evaluate GuySuCo’s assets.
An announcement was made as recently as Friday that NICIL had also sold properties in New Amsterdam and Linden. A Queenstown, New Amsterdam property was sold to the Guyana Revenue Authority by public tender for $50 million; while 1.06 acres of land in Linden were sold to M&L Land Development for $2.2million.