Aug 11, 2018 News
PricewaterhouseCoopers has completed the valuation of a second sugar estate, making it two that potential investors can assess and submit bids for. The Information Memorandum for Skeldon Sugar Estate has now been completed and is available for purchase.
According to an advertisement in Kaieteur News yesterday by the National Industrial and Commercial Investments Limited/Special Purpose Unit (NICIL/SPU), Skeldon Estate is the second estate, with Enmore being the first, for which the Information Memorandum will be available between August 6th and August 27th.
The SPU is the entity that is charged with overseeing the privatization and divestment of the four closed estates.
“The Information Memorandum will contain, among other things, the timeline for the bids, process of ranking the bids and further details of assets for sale.”
The advertisement said that at Skeldon, there is an attractive investment opportunity for sugar producers, including opportunities to enter new areas like co-generation, alcohol, ethanol and brown bulk sugar in a hurricane-free zone.
The estate includes 1,750 hectares of freehold land with a 110,000 tonnes sugar capacity factory, warehouse and offices.
At the Corentyne, Berbice location, there is also water treatment, co-generation and diesel plants, inventories, equipment and rolling stock.
Investors can also look forward to a long term lease of initially 25 years for an additional of 11,900 hectares of cultivated lands with options to renew.
The information memorandum also highlighted the fact that Skeldon has a recently built automated factory with co-generation plant and a large pool of experienced workers.
Guyana’s position of growth in 2020 from oil was also highlighted.
However, almost US$200M Skeldon Estate has been a major issue for consecutive governments.
Though commissioned by the former President Bharrat Jagdeo in 2009, who hailed it as the saviour for the sugar industry, the factory failed to kick start, plagued with one technical issue after another.
It ended up slowly draining the cash reserves of the Guyana Sugar Corporation, which also had to contend with a graduated 36 percent price cut with its market in Europe.
The Coalition Government had made it clear that it is unable to sustain GuySuCo – and by extension Skeldon, which fell under the Corporation – with any more of the billions of dollars in bailouts that Government had to plug into the industry annually.
With regards to the Enmore estate, the Information Memorandum said that there are 25 acres of freehold land with 60,000 tonnes sugar capacity factory, sugar packaging house and warehouses; inventories, equipment and rolling stock and a long-term lease tenure, initially 25 years, of 6,900 hectares of arable lands with options to renew.
Among some of the highlights, will be the advantage of operating a sugar factory, with packaging warehouse and fields in five hectare plots each next to water transport system.
There will also be access to a “well established research facility and nursery with several cane varieties” and a local pool of experienced factory management and well-educated workforce.
NICIL/SPU said that agreements are in place for cane supply from experienced farmers utilising estate lands. It was explained that the estate will offer 85% mechanization from mechanical tillage/planting to harvest and excellent drainage and irrigation systems with new pumps.
NICIL/SPU also said that Guyana is a full member of the CARICOM Trading Bloc with the country boasting a stable democracy; projected growth economy and large scale oil production to start in 2020 – defined by the New York Times as“…poised to become the next big oil producer in the Western Hemisphere…”
The Information Memoranda are being sold for US$1,000 each with potential investors required to sign a confidentiality agreement.
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