The National Industrial and Commercial Investments Limited (NICIL) has a lot on its plate for 2019 but chief among them is restructuring the Guyana Sugar Corporation into an efficient, profit-making entity within a short timeframe.
In charge of this operation is NICIL’s Special Purpose Unit (SPU) which is headed by Colvin Heath London. During an interview with the Guyana Standard, London said that a number of plans have been streamlined which will ensure that GuySuCo is no longer a leech on the national coffers.
The SPU Head said, “One of NICIL’s main focuses right now is to fulfill its mandate as it regards the privatisation of the identified estates of GuySuCo. Last year NICIL secured a historic US$150 Million Bond for GuySuCo. This is the first type of transaction of its kind in Guyana. The magnitude of it is certainly unique to Guyana and is one of the largest financial transactions in the Caribbean.”
London added, “What it does show is the confidence of investors to be able to lend money to Guyana with the hope of recouping it. The bond was oversubscribed which meant that there were persons dying to put their money into Guyana on the strength of a government guarantee. It shows that we have a credible country and credible economy. The transaction was consummated entirely using Guyanese companies and local legal counsel.”
As it regards the privatisation of the identified estates at Rose Hall, Skeldon, Enmore and Wales, London said that with the assistance of PricewaterhouseCoopers (PwC), NICIL was able to accomplish several things. In this regard, he said that a detailed analysis of the financial performance, prospects, and structure of the sugar estates was done; a comprehensive valuation of the estates utilising various established methodologies was completed; and there was the identification and valuation of major assets of the three estates and determination of the fair market value in the industry for rolling stock, equipment, land and buildings, and the intangible assets.
He said, too, that there was preparation of Information Memoranda of the three estates; and due diligence, analysis, and evaluation of the offers submitted.
The SPU Head said, “GuySuCo should be in a cash positive position, as we injected close to $2B at the start of 2019 from the Syndicated Bond which was to be used for operating expenditure among other costs. During this period, they would have also been in receipt of inflows from the sale of sugar from the second crop of 2018, as well as, commencing the work plan for the first crop of 2019.”
He added, “All-in-all once the entity is run under prudent financial and operating management, there ought to be no reason that it will not achieve profitability within a short time frame after the implementation of the major capital programmes we have put forward to them.”