– company still working to generate income

THE cash-strapped Guyana Sugar Corporation (GuySuCo) is expected to receive a much-needed financial “bailout” soon, said Chief Executive Officer (CEO) of the National Industrial and Commercial Investments Limited (NICIL), Colvin Heath-London.

It was reported that the Novel Coronavirus (COVID-19) pandemic and other prevailing national conditions have rendered the national treasury incapable of providing a bailout to the “cash-strapped” GuySuCo, but all hope is not lost, as the company is expected to benefit from $1.5 billion, paid to NICIL for the sale of land.

When asked if funds were already disbursed, Heath-London told this publication that the company is looking to do a disbursement this week, or as soon as possible.

The finance ministry, in response to GuySuCo’s request for a bailout, had cited a $30 billion bond backed by NICIL’s assets and guaranteed by the Government of Guyana, which was secured through NICIL to retrofit and revitalise the three remaining sugar estates.

During the period July 2018 to February 2020, $9,720,759,568 was disbursed to GuySuCo to fund its capital and operational expenditure – much of which was outside the terms of the bond.

Considering the potential disbursement, Heath-London said NICIL is exploring avenues of income generation, before deciding on a specific figure, because it is not a case where the company has money “in hand.”

“We have to look at how much we can bring in and then determine what we will be able to give them…It is not a case where we have the money in hand, we have to generate the income,” said the CEO.

In a letter to President David Granger on May 15, Chairman of GuySuCo’s Board of Directors, John Dow, had said the sugar corporation was in a “dire financial crisis” with billions in debt, and insufficient finances to execute critical factory maintenance.

“Despite improvements in the productivity of cane, GuySuCo’s sugar production for the last two crops has fallen short of expectations and the current COVID-19 pandemic has exacerbated the problems experienced in meeting the 1st crop 2020 production targets…As a result, the cash generated from operations cannot meet the ‘outgoings’, particularly when external funding has been difficult to obtain,” Dow said as he painted a vivid picture of the financial challenges facing the sugar industry.

GuySuCo’s condition could dwindle even further if “crucial creditors” are paid, said Dow, noting that if the corporation takes this recourse the company would be out of cash before the second week of June.

In referring to the condition of the sugar corporation, President Granger had said, “it is very unfortunate we are in this position. Throughout the tenure, we have been engaged in trying to resolve the issue of the industry.”

In executing its plan to resuscitate the industry, President Granger said government had to make “hard decisions,” which included the retrenching of workers. But, despite the scaling down of the industry and provision and future provision of government bailouts, the President said there is no guarantee that the corporation could produce sugar at world market prices and function economically.

“We have done everything possible to return the industry to normalcy and even profitability…we will continue to help and not send anybody home…we want an efficient sugar industry which can produce sugar at competitive prices,” said President Granger.
The idea is to compete with Brazil, Cuba and other “heavy” sugar producers, but in order for Guyana to do that, the industry needs to be economically viable and feasible.