…but lack of critical info from GuySuCo hindering sale of other estates
AN Indian-Ghanaian-Guyanese consortium is in line to purchase the Rose Hall Estate but the lack of critical information from the Guyana Sugar Corporation (GuySuCo) on the Skeldon and Enmore Estates is making it difficult for those two estates to be marketed, Head of the National Industrial and Commercial Investments Limited’s Special Purpose Unit (SPU), Colvin Heath-London said on Monday.
Addressing reporters alongside PricewaterhouseCoopers (Jamaica) Managing Director Wilfred Baghaloo, London disclosed that the Indian-Ghanaian-Guyanese consortium is the “front runner” among the three companies that have bid for the Rose Hall Estate, located in Rose Hall, East Berbice-Corentyne (Region Six).
According to London, negotiation with the consortium is expected to conclude by the end of July. PricewaterhouseCoopers, an International Financial Services Provider, is negotiating the sale of the three estates – Rose Hall, Enmore and Skeldon – on behalf of NICIL-SPU.
“Surprisingly out of the three estates, Rose Hall has received most of the interest and out of the three companies that are interested in Rose Hall, PricewaterhouseCoopers is finalizing discussions with one of the companies. Those discussions are at a delicate stage,” the SPU Head told reporters at NICIL’s Camp Street Office.
It is the hope of the SPU that PricewaterhouseCoopers would be able to successfully conclude discussions on the sale of the estate to allow for ratification from Cabinet. PricewaterhouseCoopers Managing Director said the Indian-Ghanaian-Guyanese consortium intends to remain in the Sugar Cane Industry. “Their primary intention is to remain within the sugar cane industry. They intend to produce sugar, they intend to produce cosmetics or input for cosmetics and they intend to produce liquid sugar,” Baghaloo detailed.
It was noted that the partners in Guyana that make up the consortium will be making technical and legal input while the Ghanaian partners are responsible for logistics and the factory. Indian partners that also make up the consortium are specialized in sugar production and machinery.
Baghaloo disclosed that he met with Cabinet for the first time on March 19, and updated the Ministers of Government on the progress of the sale of the three estates.
“I indicated then, and my position remains the same, that there would likely to have a conclusion on the privatization on one of the estates, by the end of July, and that by the end of November this year, we would have a better (understanding) as to when we will be able to privatize the two other estates,” he said.
Noting that the discussions have progressed smoothly thus far, Baghaloo, like Heath-London, is optimistic that the negotiation would be successfully concluded in July.
“We have progressed quite nicely with the discussion but nothing is complete as yet. We are now sharing our draft agreements with their legal team and we will see what their legal team response is,” Baghaloo said.
The Managing Director of PricewaterhouseCoopers is expected to return to Cabinet this month to provide them with an update on the negotiation with the Indian-Ghanaian-Guyanese consortium, and the expressions of interest for the two other estates.
Stating clearly that PricewaterhouseCoopers was contracted by NICIL-SPU to privatize the three sugar estates on the basis that they will remain within the sugar cane industry, not necessarily in the sugar industry, Baghaloo said several challenges have been encountered, as is expected, and have been detailed to Cabinet.
“We have a unique feature where we have closed three estates, and we are asking the private sector to take ownership of those three estates, while government retains the ownership of three estates. That creates many challenges,” he posited.
He said investors are asking several questions. One, are the three estates identified for privatization the least profitable among the set? Secondly, why only three estates are being privatized? Thirdly, how would the Government maintain an environment that would allow the private sector to fairly compete with public sector entities for scarce resources such as access to market, people and transportation? Those are the primary concerns of companies, Baghaloo posited.
According to him, Cabinet was written to on the need to create an enabling environment, and several follow-up letters were dispatched with the last letter sent on May 14.
In addition to those challenges, Baghaloo said he wrote Cabinet complaining about the lack of information, which has proven to be a challenge. He said information is necessary to foster discussions on the sale of the Skeldon and Enmore Estates, which for a large part would require information on the value of the assets.
“The challenges that we have augur primarily around information that we need from GuySuCo, financial information for each of the estate; to date I have not received that. I have received the audited account for GuySuCo, that’s one thing; I need information for each of the estates, the valuators need information on major equipment, who are the suppliers, the last time the equipment were maintained,” the PricewaterhouseCoopers Managing Director detailed. In the case of Skeldon, he said, several companies have expressed their interest; however, they require information on the factory, and the equipment therein.
“With Skeldon, the challenge is proper information on Skeldon, the age of the equipment, the manufacturer of the equipment; we are still struggling to get information on the co-generation (plant), particularly the historical performance of it,” he pointed out.
Negative reports on the Skeldon Estate and Factory are now among concerns of the investors. As such, it calls for greater due diligence and even investment. “We have interest in Skeldon and we continue to have interest in Skeldon but it has not reached the level of negotiation that we have had with Rose Hall,” Baghaloo posited.
In the case of Enmore, the lack of cane supply is among the factors that makes it least attractive among the set, according to the PricewaterhouseCoopers Managing Director.