The Special Purpose Unit (SPU) of the National Industrial and Commercial Investment Limited (NICIL) has clarified that it needs approximately $30 billion to support the Guyana Sugar Corporation (GuySuCo) over a four-year period.
The SPU – which was tasked with handling the divestment of GuySuCo’s assets – said in a statement today that it is in the process of securing the funding for the short-term and current operations of the estates.
“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 statement said.
The Finance Minister told reporters last week that $10-15 billion is needed to reopen the Skeldon and Enmore Estates for the next few months until they are sold off to private investors.
But the SPU said the total sums required is $30 billion which will also be utilised to manage the estates which will be kept open, i.e. Albion, Blairmont and Uitvlugt.
“These funds will provide a much needed capital injection, support infrastructure maintenance and upgrades at Albion, Blairmant, and Uitvulgt, and develop new co-generation capacity to support estate operations and sell to the national grid,” the statement explained.
Another area of immediate collaboration between the SPU and GuySuCo, the statement added, is the reopening 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,” the statement outlined.
The SPU explained that the Demerara Distillers Limited (DDL), a local rum manufactuer, 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,” the SPU said.
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,” SPU stated.