Head of the National Industrial and Commercial Investments Limited’s (NICIL) Special Purpose Unit (SPU), Colvin Heath-London told the media today that they have secured the $30 billion that they were seeking in the form of a syndicated bond to support the Guyana Sugar Corporation (GuySuCo) and its remaining estates.
He is reported to have said that GuySuCo might receive the funds in two weeks time, while mentioning that the rates secured for the bond were “very good.”
Republic Bank was outlined as the leading contributor to the Bond. In the case of Syndicated Bonds, according to Reuters, a small syndicate of banks get together, “and the banks underwrite the bond, promising to buy it if there aren’t enough bids in the market. Then they go out and build a book and sell the bond to investors.”
NICIL had outlined earlier this year that the funding is expected to cover a four-year period and will provide capital, support infrastructure maintenance and upgrades at Albion, Blairmont and Uitvlugt.
The funds are also expected to go towards developing new co-generation capacity for the estate operations and the national electric grid.
GuySuCo which has a history of debt, at the end of 2015 owed $78.6 billion. In January of 2017, the National Assembly’s Economic Services Committee was informed that the debt showed a marginal decrease to $77 billion.
This money was owed to the National Insurance Scheme (NIS), the Guyana Revenue Authority, the Caribbean Development Bank (CDB) and others.
The incumbent Administration, in a move it dubbed to cut costs, closed the Wales, Enmore and Rose Hall Sugar Estates, and intends to sell the Skeldon Sugar Factory. The SPU was set up to oversee the divestment.
The closure of the four estates saw some 5000 GuySuCo workers losing their jobs.
Aside from the $30bn syndicated bond, Government through NICIL said it was also in the process of borrowing some $10-$15bn from a consortium of commercial banks to fund “miniature operations” at the Skeldon and Enmore Sugar estates that were initially closed despite the protestations from several quarters for Government not to go that route.
Finance Minister Winston Jordan had said that the decision to reopen the estates, at a smaller scale, is a marketing strategy aimed at rendering the operations more attractive to potential investors.
Jordan said the loans to fund the operations of these two estates will be repaid by NICIL over a period of three to five years.
He also declared that revenues generated from the sale of estates and other assets would be used to repay the loans.
While the Opposition People’s progressive Party/Civic (PPP/C) welcomed the move taken by Government to have at least two of the sugar estates reopened soon, its leader Dr Bharrat Jagdeo, had said that it proves Government’s move to close the sugar estates in the first place was purely political.
Moreover, Jagdeo told journalist at a press conference in February of this year that he is concerned that the intent of the $15bn loan is to “clear off liabilities for GuySuCo- maybe the short term liabilities- so that the people that they have already identified to take over these estates will come in with a clean slate.”