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GuySuCo begins to pay creditors – Deputy CEO

Jan 17, 2010 News

While he was not in a position to say exactly how much and to whom, Deputy Chief Executive Officer of the Guyana Sugar Corporation, Rajendra Singh, says that the sugar company has commenced payments to its creditors.

Singh informed this newspaper yesterday that while full payments are not being made all of the creditors are being dealt with simultaneously on a proportional level.

When GuySuCo could not make payments to its employees at the stipulated deadlines the company had to negotiate with its creditors to defer payments to a later date.

GuySuco, in a December statement, told media entities, “We ask our creditors at this difficult time for their continued understanding. We shall also be discounting sales of our molasses at a significant cost.”

Tate & Lyle, GuySuCo’s UK customer, had also agreed to advance money to the Corporation on the basis of the next shipment of sugar to it. “We do appreciate their support at this time (and this has not been the first occasion).

Additionally, we have deferred an ING loan installment to the last week in December 2009 and we thank ING for their understanding.”

The balance of funds to meet the retroactive payment to workers was met through an emergency loan from a consortium of local banks namely Bank of Nova Scotia, Citizens Bank and Demerara Bank.

The company had found itself in such a cash strapped situation that skeptics had begun to say that it was bankrupt, causing Agriculture Minister Robert Persaud to defend the entity. “GuySuCo is not bankrupt in anyway,” he said.

Persaud had said that it is widely known that the company has been facing acute cash flow problems, especially from start of construction of the Skeldon Sugar Factory.

He said that the GuySuCo administration has to be creative in managing its tight cash flow. Simultaneously, it has to manage its debt engagement with the bank, he added.

He also attributed some of the recent kinks as it relates to sourcing cash to the end of year environment.

The Company’s Chief Executive Officer, Errol Hanoman, had also expressed his sentiments on the bankruptcy contention saying that the use of such terminology was inappropriate, given the role of the company with respect to the national economy.

He stated that it is well known that the company has been having some financial setbacks, but he insisted that it had no problems receiving loans from any banks.

The Corporation’s CEO emphasised that there must be a balance between borrowing and resources.

As such, he stressed the importance of selling the Diamond lands, which he said should rake in more than $30B and is of utmost importance to the company’s turnaround plan.

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