PricewaterhouseCoopers selected as GuySuCo’s valuator

-corporation’s management, special unit in tussle over assets

International accounting firm PricewaterhouseCoopers (PwC) has been selected by the Special Purpose Unit (SPU) of the National Industrial & Commercial Investments Limited (NICIL) to undertake a valuation of GuySuCo’s assets for divestment and privatisation.

“They will now do the valuation, put together the prospectus and they will make sure that all the interested persons have all the information and that it will be a level playing field,” SPU Head Colvin Heath-London told Stabroek News on Thursday.

In a subsequent press statement, NICIL said PwC has been selected by the SPU as international financial services provider.

It noted that four firms-PwC, Ernst & Young, Delloite and KPMG-were invited to the tender but all except for the latter made presentations to the NICIL/SPU evaluation team.

“After the presentations were concluded the evaluation team selected PwC. All negotiations with PwC have been completed and a contract is expected to be signed by December 18, 2017,” the statement said.

“PwC, ranked as the most prestigious accounting firm in the world for the last seven consecutive years, will be conducting the valuation of all assets under the control of GuySuCo, in addition to providing other advisory and financial services. After the valuation exercise PwC will develop an investment prospectus and will, through the SPU, distribute to all interested investors. PwC will be tasked with ensuring a level playing field for all interested parties and stakeholders,” it added.

Heath-London has said that that the preparations are on track to have the sugar company’s assets ready for privatisation and/or diversification. Included in these preparations were meetings with the management of GuySuCo as well as with other industry stakeholders, including the unions, the Guyana Agricultural and General Workers Union and the National Association of Agricultural, Commercial and Industrial Employees.

He also has put on record his belief that “there is a future for sugar in Guyana, and that sugar production must be protected and remain part of the economic mix in the economy.” He added that “how sugar is protected depends on a combination of options for the existing assets involved in sugar production.”

In a statement in October, the SPU had said it is interested in companies, both local and international, that could integrate the production of sugar into their existing operations and product mix. It added that companies that are in rum production, other beverage manufacturing, and food processing, for example, would be ideal as potential operators of some of the current GuySuCo assets.

It did note, however, that while factories could be sold to potential operators and investors, lands will not be sold but could be leased so that they remain the state’s property.

The statement also pointed out that sugar lands and sugar factories are not the only assets under GuySuCo’s control as for decades the company was entrusted with providing and/or managing a wide range of other assets, including community centres, sports grounds and other recreational facilities, primary health care facilities and drainage and irrigation networks.

Friction

Last month, there appeared to be friction between GuySuCo and the SPU over assets.

The movement of machines and equipment from sugar estates billed to be sold or privatised to others that are functional was undertaken by GuySuCo without notice to the SPU.

“GuySuCo has been moving out their machines from Enmore and Skeldon, which are proposed to be closed and taking them to Albion and Uitvlugt but that is not right and it is possibly to slow down the privatisation process of these two estates,” a source close to the industry had told Stabroek News.

However, when this newspaper contacted GuySuCo’s Chief Executive Officer Errol Hanoman, he said that he did not see why the movement of machines from the estates would be an issue since they are all under the control of GuySuCo’s management.

Chairman of the Private Sector Commission (PSC) Eddie Boyer has condemned the move and said that GuySuCo should not remove assets from those estates set to be sold.  “Once you are privatising, you should not remove the items unless government approves because it is their assets,” he said.

But GuySuCo officials said that the PSC’s argument was “trash” because GuySuCo was a corporation and was thus free to move its assets around to maximise its profits. “If we bring a cane transport tractor that is not being used to its full capacity from one estate to another, how is that trying to delay anything? They have already said that we are not doing enough and now we see ways to maximise our potential outputs and have taken moves to do so. Tell me how that is bad?” Hanoman questioned.

On Thursday, sources close to both sides once again laid out their cases, with an official from the SPU saying that GuySuCo had “upped its resistance to the SPU controlling assets from failed estates.”

“They really are trying to stymie the works of the SPU and are doing all kinds of things to ensure whatever is planned by the unit fails,” one source stressed.

“But PwC is an international company and will conduct its work professionally and I do not personally think that any attempts to throw spokes on their wheels will work. Getting on with the business of the SPU is priority and if we really want to make this industry work, I think everyone—and I mean everyone not only the estate workers and officials—should work together to help formulate a plan with the industry’s best interest at heart,” the source added.

An official of GuySuCo, when contacted, told Stabroek News that he did not want to speak on record but added that “The same way the SPU is looking out for its best interest, it is the same way GuySuCo has to.”

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