GuySuCo’s assets valuation to take eight months

Jan 16, 2018 News

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United Kingdom-headquartered PricewaterhouseCoopers (PwC) has begun its work to value the assets of the Guyana Sugar Corporation (GuySuCo). The project is expected to last eight months.

Confirming the presence of the auditors, the Special Purpose Unit (SPU) under the National Industrial and Commercial Investments Limited (NICIL), yesterday disclosed that an agreement was inked last Friday.

Work commenced yesterday with meetings with the SPU team at their LBI, East Coast Demerara offices.

“PwC was selected from a field of the top four international financial services providers. PwC was ranked as the most prestigious accounting firm in the world for the last seven consecutive years,” SPU explained yesterday.

Late last month, Government signed orders transferring four factories, slated for closure, and lands attached to them, to NICIL.

The four estates – Skeldon, Rose Hall, Enmore and Wales – have about 70,000 acres of land between them, plus factories, houses and administrative buildings, along with equipment.

It is up to PwC to determine what those assets are worth so that Guyana can have a fair price when it comes to deciding on the investors in the privatization and divestment phase.

The four estates have been closed, with up to 5,000 workers sent home. They are to be paid half of their severance by month-end, and the rest in the latter half of this year.

According to the SPU, the agreement was signed by NICIL – a government-owned company which manages investments – and the consultant.

Today, the members of the PwC team will be meeting with the head of GuySuCo.

With Chief Executive Officer (CEO) Errol Hanoman, having left at the end of December, more than likely the meeting will be with CEO (ag.) Paul Bhim.

“The PwC team will be carrying out the valuation of all assets under the control of GuySuCo, and develop and investment prospectus as part of the consultancy. In addition to the valuation, PwC is expected to provide other advisory and financial services.”

SPU’s head, Colvin Heath-London, speaking after the meeting with the PwC team said: “We are encouraged that we were able to get the PwC team in so quickly. With the current developments in the sugar cane sector we are working to bring stability to the industry and affected communities as quickly as possible.”

Heath-London added that: “the work of PwC, given their vast experience in this type of process, will help all decision makers to arrive at the best decisions for the assets of GuySuCo, for other business that are in the GuySuCo supply chain, and most importantly for the workers, who are uncertain about their future.”

PWC will be tasked with ensuring a level playing field for all interested parties and stakeholders as the process goes forward, the unit explained yesterday.

Also speaking yesterday, after meeting with the SPU was PwC Caribbean Partner, Wilfred B Baghaloo, who said: “We look forward to this opportunity of working with Government and the people of Guyana to  find a practical economic solution to the privatisation of the three sugar estates on a timely basis. This is indeed a challenging task, but we believe that we are equipped with the necessary experience and skill set to ensure a successful project.”

Meanwhile, Baghaloo was asked about a recent incident in India where it is alleged that a partner in the multi-national firm has been banned from auditing listed companies for two years, over one of the country’s biggest corporate scandals. This was reported by the BBC last week.

Price Waterhouse was auditor for Satyam computers when company owner Ramalinga Raju admitted to inflating earnings. The ban by Indian market regulator the Securities and Exchange Board (Sebi) will come into effect on March 31.

PwC is quoted as saying that it will appeal the decision in court. It added that “there has been no intentional wrongdoing by [PwC] firms in the unprecedented management perpetrated fraud at Satyam”.

In January 2009, Raju stunned the corporate world by admitting to accounting malpractices to inflate earnings and assets for years.

Baghaloo noted that he cannot comment with respect to the Indian matter with PwC partner, as it is a matter in appeal.

“In summary, the matter relates to a 2009 event relating to a specific company and a specific stock exchange. We continue to service our numerous clients in India, and we continue to enjoy their support and confidence.  As it relates to the task at hand in Guyana, our long history of strong commitment to excellence, integrity, innovation and quality will continue.”

PwC is described as a multinational professional services network headquartered in London, United Kingdom. It is said to be the second largest professional services firm in the world, and is one of the “Big Four” auditors, along with Deloitte, EY and KPMG.

Vault Accounting 50 has ranked PwC as the most prestigious accounting firm in the world for seven consecutive years, as well as the top firm to work for in North America for three consecutive years.

The presence of PwC would be critical to the ongoing process as the assets of GuySuCo are worth billions of dollars. There has been intense interest in Enmore, including from the Demerara Distillers Limited.

The SPU has received over 70 proposals for the four estates so far.

The closure of the estates has angered the unions and galvanized the Opposition, whose support base has been built on the sugar industry.

GuySuCo, with three estates left now, has to meet a target of 115,000 tonnes this year, while the SPU will be managing the four estates that have been transferred to NICIL.

The unit wants the four estates up and running with staffers rehired, until investors are found.

GuySuCo is in severe trouble, with Government forced to pay its loans and with over $32B plugged into the industry, in the last two and a half years there has been little to show.

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