Sale of Sugar factory slated for June 30th

On Tuesday, it was officially announced that American Sugar Refining Company will be acquiring the eighty-one percent shares held by the employees of the Belize Sugar Industries. It is a major transaction involving sixty-two million US dollars which will be used to improve production, as well as for the settlement of outstanding debts with creditors, including I.N.G. Group and First Caribbean International Bank.  There is also a ten million dollar loan from the Government of Belize which was used as bailout for B.S.I. News Five’s Isani Cayetano has reported on what the deal means for B.S.I. employees, tonight he reports on the take from the government’s side.

Isani Cayetano, Reporting

With the sale of controlling shares in Belize Sugar Industries Ltd. to American Sugar Refining Company inching towards its June thirtieth deadline, brokers, including attorney Michael Young and Minister of Rural Development Godwin Hulse, have lauded what the negotiating team considers to be the benefits of the A.S.R. deal.  According to Hulse, the Barrow Administration, which loaned B.S.I. ten million dollars in November 2010 as part of a bailout package, is on the side of the company’s management and employees to have A.S.R. purchase majority stock in the fiscally-challenged business.

Godwin Hulse

Godwin Hulse, Minister of Rural Development

“Government of Belize has, in addition to its shareholding, a ten million dollar loan which it put into B.S.I. towards the end of 2010 as part of supporting the company through that difficult period with working capital.  Government is, of course, keen to recover its ten million dollars.  The Cabinet is very supportive of this move.  What it does, we see it as strengthening the industry, putting it on a very, very safe, very, very solid on a growth path and it should, of course, result in increasing production in the north, of cane, production of sugar, increasing foreign exchange which will now be coming to the country having gotten rid of the big loans and some of the other commitments we had and generally should result in growth in the north in employment, investment and everything else.”

While it is anticipated that along with a new majority owner will come greater production demands, Michael Young, attorney for the B.S.I. Group, believes that the tremendous show of support by the membership of B.S.I. Employees Holding Trust is a nod to the endeavors of the administration in attempting to rescue the company from being overdrawn.

Michael Young

Michael Young, Attorney for B.S.I. Group

“It is also a very strong reflection of the appreciation of the efforts of management in taking B.S.I. from a debt-strapped company to a position where instead there is an injection of equity that will result in a debt-free company that can flex to expand for the benefit of the beneficiaries and for the strengthening of the sugar industry on a whole.”

Bolstering the industry, through this deal, should also see the removal of previous constraints, particularly with regards to the supply of sugar cane.

Joey Montalvo

Joey Montalvo, C.E.O., B.S.I. Group

“One of the big constraints was, in fact, cane supply.  A.S.R. has the know-how and will be able to, because of that know-how and the resources and because of their competence, will be able, as Mr. Carballo said, to exploit the potential for cane farmers to grow their cane supply because we have the scope for the cane farmer to increase production from an average of say seventeen tons of cane per acre to at least twenty-five to twenty-eight [tons].  So there is tremendous potential there.  So it is a very wholesome proposal and it certainly is a great opportunity, this partnership with American Sugar Refining to propel the sugar industry forward.”

Speaking on behalf of his ministry, Hulse says that he is elated since the arrangement promises a solid foundation upon which residents of the sugar belt can sustain their livelihoods.

Godwin Hulse

“From my own ministry as Minister of Rural Development I am extremely excited because what it does, it says that the villages up north and the towns up north that I am responsible for should of course have an economic basis upon which they can comfortably survive and grow, sugar being the main industry in the north.”

According to Young, despite the acquisition, B.S.I. will remain the owner of the company’s resources.

Michael Young

“Belize Sugar Industries Ltd. will remain the company that has these assets.  It is only that A.S.R., American Sugar Refining Inc., is coming in to be a shareholder in the company and the history, as we understand it, of A.S.R. is that when they go into a particular country that company continues to operate in terms of national management the way it did before.”

Reporting for News Five, I am Isani Cayetano.

The B.W.U., which forms a part of the B.S.I. Employees Holding Trust, supported the proposal to relinquish shares once A.S.R. reduced the time frame for payment of five point two million dollars in dividends to eighteen months.