Citrus officials seek support for share sale

It’s a major cash investment in a key Belizean industry … but in the business of growing and processing citrus, no matter how sweet the fruit, somebody always seems to swallow a mouthful of seeds. News Five’s Janelle Chanona reports from the Stann Creek Valley.

Bridget Cullerton, C.E.O., Citrus Growers Assoc.
?My hope and belief is that once our growers understand this and see the details I really think they will say: yes, let?s go for this!?

Janelle Chanona, Reporting
At least that?s what the board of directors of the Citrus Growers Association are hoping tonight following flak from members over an investment agreement it signed with Eastern Caribbean investors. No money has changed hands but C.G.A. chairman Ernest Raymond admits it?s pretty much a done deal.

Ernest Raymond, Chairman, C.G.A.
?The investment agreement has been signed. But before it really becomes effective, we are awaiting the re-structuring of the companies to facilitate the dividend, and of course for the money to come in. So one, they say it is a done deal, yes. But on the other hand the implementation or execution of any investment agreement from time to time issues might arise. And as such it might be subject to review by the board of C.P.B.L.?

Janelle Chanona
?So at this meeting on Saturday with your larger membership if there is ninety percent from the floor disapproval the board would have the legal elbow room to change something??

Ernest Raymond
?Well at first I would hope not. The explanation that will be provided, as it relates to the specific concerns, I am confident that growers will be convinced that those issues raised that there is nothing wrong with those issues raised. So that?s my hope.?

But at a special general meeting called for this Saturday, some twenty nine growers have officially moved a motion of no confidence against C.G.A.?s board, contending that the directors have secretly signed a contract that heavily favours the international partners: out of Barbados and Trinidad: Banks Holdings and Blue Waters Limited.

Henry Canton, C.E.O., C.P.B.L.
?This contract is structured in such a way to favour all the shareholders that have an investment in C.P.B.L. What I mean by that is that there are majority shareholders and minority shareholders. If somebody comes into a company for forty-six and a half percent and does not have some say it won?t work. They will not invest, however, that those not go to say that because of them having there say means that they will have their way, because the majority of share is also protected. What I mean by that is that they are intimating that Blue Waters or banks or whoever controls, and they don?t control, because there is nothing they can do that the other side does not have to agree with, vice versa. Orange is very high right now, but that?s only over the last two months. But yes the scenario had changed; however, what has not changed is one our debt burden. It is still very high. Forty million our debt, thirty million our short term debt. So we still need equity investment to make us stronger. Whenever the price of citrus gets high the majority take goes to the grow and not necessarily to the processing, so there are some difficulties and we don?t want to change that. Because we feel that money in the pockets of the growers we will get volumes and quality of fruit, however, it is a burden on the company. So even with higher prices it has become much more difficult for the processor to be able to take itself out of that debt.?

According to the Chief Executive Officer of Citrus Products of Belize Limited, Henry Canton, Belize needs to diversify into the more lucrative market of value added products … and this deal will open those doors in the Caribbean.

Henry Canton
?What Banks and dem brings to us is their brand. Therefore, we don?t have to spend that time developing our bank. And because of C.S.M.E, the Caribbean Single Market Economy, it is one area. Therefore, we will take their brand and share it around all the countries in that block. What strategic partners in Central America in would bring to us is also brands and they will also bring distribution. So it would have taken Citrus Products of Belize five to ten years to get into some of these things. It is questionable as to how successful we would have been, but what we are bringing is successful partners to the table.?

Under the terms of the deal, the Caribbean partners would take control of forty six and a half percent of C.P.B.L., at a cost of twelve and a half million U.S. dollars.

Bridget Cullerton
?The whole money is going into debt reduction rather than make the factory bigger, greater. It is to reduce that debt.?

Janelle Chanona
?So what is dollar value of debt prior to the twenty-five million??

Bridget Cullerton
?Well it is about eight-two million Belize, with about sixty percent of that being the long term, and forty the short term.?

Another point of contention has been the allegation that C.P.B.L. is being restructured to issue dividends to guarantee a five million dollar yearly return on the investment from Blue Waters and Banks Holdings.

Henry Canton
?Who in this new era is going to invest any money without some assurance that they will be able to get there money back out. What we did when they came up with the dividend, it was a percentage based on the investment that was coming in. However, for every dollar that is given in dividends the banks or the Caribbean will only get forty-six and a half percent. The other shareholders, which are the growers, will be getting fifty-three and a half percent. So it is not as though that the only person that is guaranteed a dividend is the investor that is not true. Everybody has to share. Number two if there is no profits in the company by law you cannot pay dividends, so to say that these persons are guaranteed a dividends is also again false.?

Bridget Cullerton
?Now, we?ll be able to have not just what growers make as growers, but what they make as literally owners of the factory by this enhanced company that will now start to give us a profit– now that we have restructured it to the point where it can give a profit. I mean decades and decades went by and little growers in the company didn?t get a penny for their money and that is why so many of them wanted to sell their shares. Now I see this investment agreement literally doing for the factory what we had wanted to do with the price stabilization from years ago.?

Henry Canton
?If we stay the course, if we are allowed to get the equity investment and go in the value add and the strategic market places, the regional market places that citrus will not be going up and down like it usually does. It will have a branded price, where we can have a stable price. With a floor and a ceiling that will allow growers to participate and form better quality fruit and then we would have a stable citrus industry. Because what we would have done is vertically integrate the whole business.?

The special general meeting starts at nine thirty and will be held at the ITVET building at mile nine on the Stann Creek Valley Road.

Reporting for News Five, I am Janelle Chanona.