US-based company among bidders for closed sugar estates

The National Industrial and Commercial Investments Limited (NICIL) on Thursday revealed it has received 10 bids, which include one from a Florida-based company with Middle Eastern investors for the privatisation of the three closed sugar estates in Guyana. This announcement comes following Government’s downsizing of the sugar industry, which has left thousands jobless, in an effort to reduce expenditure owing to the Guyana Sugar Corporation’s (GuySuCo) being cash-strapped.

United Kingdom-based PricewaterhouseCoopers (PwC) was tasked by the Finance Ministry’s Special Purposes Unit (SPU) to the value of three estates –Rose Hall, Skeldon and Enmore – which Government put up for privatisation. PwC partner, Wilfred B Baghaloo, who was appointed in March 2018 to oversee the process, held a press conference at NICIL’s Camp Street, Georgetown office on Thursday, where he told reporters that 12 companies obtained the Information Memoranda (IM) for the estates which was sold to bidders for US$1000. However, only 10 submitted bids.
According to Baghaloo, the PwC will be working to determine if any of the investors are affiliated with each other as the SPU wanted the process to be competitive. The official, who originates from Jamaica told members of the press that the bidding process closed Wednesday, following the marketing period which started in July.

The official said that he could not have verified the names of the bidders but added that he would provide those names by today. The opening of the bids was observed by bidders, PwC, a team from the Auditor General’s office and members of the Steering Committee. Baghaloo said now that the bids have been opened, the second step is to analyse the bids in accordance to the evaluation criteria as outlined in the Information Memorandum. Thereafter, the PwC will make recommendations to the Steering Committee and NICIL which will then make recommendations to Cabinet.
“Our intention is to say to the Staring Committee and the SPU in seven days that the bids we have received comply; then the evaluation should take some time,” the PwC official stated. The PricewaterhouseCoopers official while being tight-lipped on the names of the 10 investors said regional players also submitted bids. There was a pre-bid meeting held on September 25, 2018.
“Major concerns of the potential investors related to regulations needed to ensure fair competition between Government, the functional of the factories and access to markets,” the PwC official highlighted.
He added too that some were concerned if they would be getting “scrap metal” for their investment.
An information memorandum which Guyana Times obtained showed the asset registry and land inventory for each estate. The document further outlined that Government is not obligated to accept any offer or bid though the reopening of the some of the factories was said to have sparked interest in the bidding process, especially from the international market. Investors visited the various estates since August, where they made assessments of the facilities as part of the preparation of their proposal to the Special Purposes Unit.
The SPU under NICIL secured a $30 billion through commercials banks, both in Guyana and the region, as part of the diversification initiatives. The bond was secured solely by bondholders in the Government, and not against any assets of NICIL or GuySuCo. The commercial lending rate for Guyana at the time was 13.0 per cent, while the NICIL bond was issued at 4.75 per cent, which is 8.25 per cent lower than the rate that most companies borrow at in Guyana.
The PwC, meanwhile, was awarded a $60 million contract to evaluate GuySuCo’s estates. The company was however handed a two-year ban earlier this year for allegedly overstating the earnings and assets of Indian software company Satyam Computer Services. PwC was the audit firm at the time the more-than US$1 billion fraud occurred. It was the founder of the company, Ramalinga Raju, who blew the whistle on the fraud in 2009, costing shareholders billions and shaking the industry.
In its defence, the PwC affirmed that there was no “intentional” wrongdoing in the fraud at Satyam.