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GuySuCo not showing how GYD$30 billion bond being spent; bondholders “unhappy”- NCIL

NICIL headquarters.

The National Industrial and Commercial Investments Limited (NICIL) on Monday said holders of a GYD$30 billion bond to help revive the Guyana Sugar Corporation (GuySuCo) have begun asking questions about how the State-owned corporation has spent GYD$7.4 billion dollars disbursed so far.

“The bondholders and the trustees are not happy with the information coming from NICIL,” Head of NICIL, Colvin Heath-London told a news conference, saying that his entity has so far been unable to provide evidence on how the monies are being spent by GuySuCo. While NICIL awaits the detailed information from GuySuCo, he said cash was still being disbursed in “good faith”.

Between July, 2018 and April, 2019, a total of GYD$7,420,759,568 has been disbursed by NICIL to GuySuCo. So far, government has paid GYD$783,750,000 in interest as of May 22.

Repeated efforts to contact GuySuCo spokeswoman, Audreyanna Thomas proved futile.

Heath-London warned that Guyana could lose its creditworthiness and the bondholders could levy on state-owned assets that were used as collateral to secure the bond at a reasonable interest rate.

“As it is, if we continue this way we are putting NICIL and by extension the government of Guyana in default and we have been written and we have been chided by the bondholders and trustees for this,” said Heath-London who played a key role in securing the financing.

“The bondholders can decide to levy on NICIL’s assets,” he added.

Head of the Special Purpose Unit of NICIL, Colvin Heath-London (left) and Finance Minister, Winston Jordan.

The NICIL Head lamented that the standoff between his agency and GuySuCo “affects Guyana’s credibility on the regional and international markets” because foreign institutions were “plugged in” to how Guyana is operating under the bond and that could have implications for the country’s future access to financing for other projects.

Monies were requested for paying salaries and other operational costs, and proof was expected to be provided to NICIL resulting in concerns by the bondholders and trustees. “It is not in the detail that is required. In some cases, we have not been given any information,” he said.

The bond financing was expected to fund GuySuCo’s plans to improve its operations and return the corporation to profitability after decades of loss-making and high indebtedness.

Heath-London assured that none of GuySuCo’s assets were used to secure the bond which was arranged by Republic Bank for Trade and Industry. The bondholders include Guyana Bank for Trade and Industry and National Insurance Scheme.