The Special Purpose Unit (SPU) under the National Industrial and Commercial Investments Limited (NICIL), and the management team at GuySuCo have confirmed that the two teams are on the same page, working for the same goals under the leadership of the SPU.
Speaking after a recent meeting between the two teams, SPU Head, Colvin Heath-London said, “the one thing that is paramount right now is that we work together. We must work together to ensure that we get the best deal from the process for the estates put up for privatization, and that GuySuCo is successful in turning a profit with the estates is has retained.”
Acting CEO of GuySuCO, Paul Bhim, said that “the objective behind the closure of some estates was to make them available for privatization and ensure that GuySuCo becomes profitable. The best way to achieve that today is for GuySuCo management and the SPU team to work together for the greater good.”
The life of the board of GuySuCo came to an end on February 14 after the Board of Directors on NICIL, in a Special Board Meeting, made the decision to install a new board focused on the transformation of the corporation as envisioned by NICIL-SPU. The share in GuySuCo were recently vested in NICIL by an order signed by Finance Minister Winston Jordan.
The NICIL board also instructed GuySuCo to freeze all hiring and to not renew any employee contracts that are expiring at this time. NICIL has begun working with the management teal at the corporation to implement management changes, some of these changes are already being implemented and more are expected to follow in the coming weeks.
Another area of immediate collaboration between the two teams is the restarting of the Enmore Estate. GuySuCo management closed this estate at part of their plan to downsize the corporation. However, the SPU is concerned that there is cultivated cane in the Enmore Estate fields that need be harvested and processed since it represents significant revenue potential. While the SPU will provide the management for the restarted estate, GuySuCo will provide the technical support.
In addition, Demerara Distillers Limited (DDL), had voiced concern over the anticipated shortfall in molasses and its impact on their production and global market commitments. The SPU and DDL have been exploring the possibility of DDL investing in the current crops in the fields at Enmore through advance payments on molasses supply, and also participating in the management of the estate to keep it as a going concern.
PricewaterhouseCoopers (PwC), the international financial services provider working on the valuation of the GuySuCo assets now under the control of the SPU for privatization, is concerned that in order to attract the best investors and secure the highest price for the estates, they need to be seen as fully functioning operations and facilities. Closed estates will not be attractive to potential investors. The deal with DDL, if approved by the boards of DDL and NICIL would allow the SPU to meet the PwC recommendations for a quality privatization of the estate.
The second major area of collaboration is the securing of funding for GuySuCo current and short-term operations. As indicated by Finance Minister Winston Jordon recently, the SPU is seeking to secure loans, investments and other financial arrangement to support GuySuCo. NICIL-SPU has the responsibility for securing new capital for GuySuCo operations.
The funding being sought by the SPU to support GuySuCo is thirty billion Guyana dollars (GYD$30 Billion) to cover a 4-year period. These funds will provide a much needed capital injection, support infrastructure maintenance and upgrades at Albion, Blairmant, and Utilvygt, and develop new co-generation capacity to support estate operations and sell to the national grid.
The SPU is confident in its business case for GuySuCo and expects positive results with respect to securing funding for the sugar operation.