Three accounting firms in quest to value GuySuCo’s assets
The Special Purpose Unit (SPU), which was set up to spearhead the divestment and privatization of GuySuCo assets, yesterday moved one step closer to selecting an accounting firm to provide a valuation of assets belonging to the sugar company.
In a statement, Colvin Heath-London, who heads the SPU under the National Industrial & Commercial Investments Limited (NICIL), announced yesterday that the second stage in the process of selecting an international financial services provider was conducted.
According to the statement from the SPU, only three of the four firms invited to participate in a restricted tender process met the October 30 deadline for submissions. A previous statement, on October 30, claimed that all four firms had met the deadline.
The firms are presently competing to provide services, including to undertake the valuation of all assets under the control of GuySuCo, in addition to other advisory and financial services, such as the preparation of prospectus and requests for proposals as wells as marketing, advertising and the development of a legal framework.
Yesterday’s statement said PricewaterhouseCoopers, Ernst & Young, and Deloitte made presentations to the NICIL/ SPU evaluation team at the Marriott.
“KPMG which was also invited to tender did not make a submission by the deadline,” the statement noted.
Heath-London is quoted as having said that “the presentations were all very engaging and the firms all have the international and regional experience as expected. Each of the firms included persons with substantial experience with sugar diversification and privatization in the region, and as such the dialogue was rigorous and engaging.”
It is expected that one of the firms will be selected by mid-December to conduct the valuation of all assets related to the estates up for privatization and diversification, in addition to advisory, financial, and other related services.
The statement noted that Heath-London also indicated that the other preparations are on track to have the assets ready for privatization and/ or diversification. Included in these preparations are meetings with the management of GuySuCo as well as with other industry stakeholders, including the unions; the Guyana Agricultural and General Workers Union (GAWU) and the National Association of Agricultural, Commercial and Industrial Employees (NAACIE).
Both GAWU and NAACIE are reported to have expressed support for the SPU’s efforts to keep the estates operational in the interest of the economy and the workers.
GAWU President Komal Chand is quoted in the statement as having written to the SPU that “it was heartening to have learnt that the SPU holds the view that the sugar estates identified for closure and divestment are capable of overcoming their difficulties and can be restored to viable and profitable state.”
The union also expressed its belief that this restoration is possible if a different approach, which transforms the industry from a sugar to sugar cane industry, is employed.
GAWU “strongly contends that …in such circumstances, the entire cane plant would be utilized to produce several products. Similar ideas, we recognize, are also held by the SPU,” the statement noted.
Meanwhile, the union expressed concern over the reported moving of equip- ment from the estates set for privatization and diversification and urged the SPU to quickly safeguard the assets to ensure the best possible deal for these estates and the workers and communities they support.
NAACIE General Secretary Dawchan Nagasar, also expressed similar concerns to the SPU. The statement said Nagasar explained that “in light of the interaction with SPU, NACCIE is of the view that the Estates that were identified for closure/privatization/diversification are to be properly maintained because of recent GuySuCo has been moving a lot of assets from those Estates, that is, identified for closure to those estates that GuySuCo will keep. Also, those estates that are to be closed, the fields and other areas have been deliberately abandoned and left to deteriorate.”
The SPU also met with executives of the Private Sector Commission (PSC), after which Chairman Edward Boyer noted that it was “very impressed with the head of the SPU during the meeting.”
“In terms of the SPU’s approach to divestment and diversification, we believe that the PSC and the SPU are on the same page. We just cautioned the SPU that there should be full accountability and assessment, by a credible international firm, of the assets of the GuySuCo estates that are being put up for privatization and diversification. This assessment should include the goodwill and all of the community ser- vices that are provided by the estates. We need this to be done up front and not repeat the Wales experience where the estate was closed and then an assessment was being done,” Boyer added.
Under its plans to “scale down” GuySuCo, government has outlined a scheme to consolidate its operations to three estates with three factories that would produce sugar for domestic needs and foreign markets, while divesting the company’s remaining assets, including the Skeldon Estate. Following the closure of the Wales factory at the end of last year, there are plans to close the Enmore and Rose Hall factories.