By Jarryl Bryan
It seems that the Guyana Sugar Corporation (GuySuCo) is not the only commercial enterprise the Government intends to withdraw State involvement from. Next on the agenda for a complete private takeover is the Guyana Stock Feeds Incorporated (GSFI).
In a notice originating from the National Industrial and Commercial Investments Limited (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 must 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. Adding that it is not “bound to accept any proposal”, NICIL 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 nationalised the GSFI and thus it stayed until 1998 when it was put back into private hands.
At the time, the State brought in a strategic partner to reorganise the business, which was losing market share to imported feeds. Today, after an initial consolidation period under new management, 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.
But NICIL’s time as a shareholder in the GSFI has not been a smooth ride, with repeated clashes over the years with principal shareholder and Pegasus owner Robert Badal. In fact, 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 Corporation’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 for letters of interest by the SPU is identified as the first step in the process of finding and shortlisting buyers or investors.
The entity has noted too that in order to increase transparency, it is partnering with a suitably qualified international financial services firm “to provide technical and financial advisory support in the process leading to a successful privatisation and diversification of the sugar industry”.