… GuySuCo says funds used to repair factories, pay wages
GUYANA Sugar Corporation (GuySuCo) does not to have explain in detail, to the National Industrial and Commercial Investments Limited (NICIL), its use of the $30B bond, the Sugar Corporation’s Chief Executive Officer (CEO), Dr. Harold Davis told the Guyana Chronicle.
On Monday, NICIL’s Head (ag), Colvin Heath-London, said while GuySuCo has received $7.4B from the $30B bond intended to revitalise its operations, the sugar corporation has not accounted for the monies received thus far but has requested an additional $1B. But on Tuesday, Dr. Davis, while noting that NICIL was furnished with a summary of its expenditure, said “we are not accountable to NICIL.”
According to Heath-London, GuySuCo, in requesting financial support, provided broad overviews, outlining their intention, however, the sugar corporation has not submitted to date, a detailed financial report on each of the nine disbursements. He told reporters at his Camp Street Office that the bondholders and trustees are unhappy that NICIL is unable to furnish them with detailed information of the spending as a result of GuySuCo’s reluctance.
But Dr. Davis said that the trustees have not communicated this concern to GuySuCo,however, a summary of the expenditure was submitted, in addition to an account of the capital purchase made. “That is the information that any normal financial company, that we have had money from before, would want. If they wanted more details we would have also invited them to check our management account but we give them a summary of the information,” Dr. Davis told this newspaper. To request additional information, would be to meddle in the internal affairs of GuySuCo, and according to him, that is what NICIL has been doing.
“What NICIL has been asking us, we consider it an intrusion into our business. They are too intrusive but we have provided NICIL with information which we think is perfectly adequate for that purpose, that is our position but we will respond in time,” the GuySuCo CEO said.
On July 13, 2018, GuySuCo received $880.7M while on August 10, 2018, another $1B was disbursed. On October 11, 2018, $1.2B was given to GuySuCo; on November 9, 2018, $907.7B; on January 8, 2019, $414M; January 10, 2019, $486M; January 15, 2019, $520M; January 18, 2019, $500M; and April 5, 2019, $1.4B – a total of $7.420B.
According to the Trust Deed signed on May 24, 2018 between NICIL and the Hand in Hand Trust Corporation Inc., “ the net proceeds from the issue of the Bonds shall be applied exclusively by the Company towards financing of the Guyana Sugar Corporation’s long-term project and capital expenditure to acquire two co-generation plants, to upgrade existing factories to produce plantation white sugar, to build storage and packing facilities, as well as to contribute for two years towards general ongoing operational costs.”
However, thus far, GuySuCo has reportedly requested monies to cover operational expenses, such as payment of salaries.
GuySuCo CEO confirmed that a percentage of the monies received was used for the payment of wages and salaries but made it clear that a large part was also used to fund repairs to the factories and other infrastructure at the remaining three estates – Albion, Blairmont and Uitvlugt – in addition to the purchase of tractors and other equipment. According to Dr. Davis, those are GuySuCo’s priorities.
“It makes to no sense to build brand new white elephants when your production capacity is weak. We have to fix our factories, restore our production capacity to a reasonable level. Co-generation of course is one of our plans but we can’t look into those new things unless we address these issues,” Dr. Davis told this newspaper.
He noted that GuySuCo had not received any significant investment since 2006, and as such, it is important to effect necessary repairs and rehabilitation before it launches into massive expansion projects such as the establishment of two co-generation plants. With the lines apparently blurred with respect to NICIL and its relationship with GuySuCo in the disbursement of the monies from the bond, Dr. Davis reiterated that the sugar corporation is not answerable to NICIL.
“NICIL is in no position to dictate to GuySuCo what its priorities are. GuySuCo has a strategic plan that outlines what we should be doing when, and the phasing of that operation. So they can’t take what should be coming in at year five and put it to year one. GuySuCo is responsible to a board of directors and not accountable to NICIL,” Dr. Davis made clear.
He posited that the Special Purpose Unit (SPU) was established under the purview of NICIL to aid in the sale of three of GuySuCo’s estates – Skeldon, Rose Hall and Enmore; the monies from which would be used to revitalise the operations of the Sugar Corporation. With no property sold today, Dr. Davis said even the monies requested from the bond has been problematic. It was explained that there are often delays when requests are made.
“We have even requested for tractors and there are several projects, which we are doing…projects have to do with infrastructure, roads, dams, factory equipment, factory repairs, tractors and that type of thing. We have several projects that we have to do to repair our infrastructure and maintain our production capacity,” he explained.
Although not entirely satisfied with GuySuCo’s handling of the funds, NICIL’s Head said NICIL will nonetheless continue in good faith. Heath-London said given the meeting with President David Granger and the Finance Minister, Winston Jordan, and Agriculture Minister, Noel Holder, he is optimistic that there will be a change in the situation. He admitted that this is not in keeping with international best practices.
Source: Guyana Times