A single bid for Sugar Company of Jamaica (SCJ)
published:
Friday | February 22, 2008
John Myers Jr., Business Reporter
Hill
Only one company has bid for the assets of the Sugar Company of Jamaica (SCJ), TheFinancial Gleaner understands.
However, informed sources say that more than one of the eight companies approved to bid for the SCJ's assets had joined together on the single bid that came in. It is also understood that the bid may involve Brazilian and US interests.
The deadline was Monday.
Agriculture Minister Dr Christopher Tufton had initially told The Financial Gleaner that four bids had been tendered.
"Four of the eight responded, so we have four bids on the table," the minister said last week. Its not clear now whether he was referring to combined interests in the bid submitted.
This takes the Government into the final stretch to shed the loss-making sugar company under a programme to be finalised by June.
The SCJ, whose assets comprise the Bernard Lodge, Monymusk, Frome, St. Thomas and Hampden sugar factories, is about $16 billion in debt, which Government will absorb as part of the deal to be struck with the successful bidder.
A valuation of the sugar assets commissioned by Hill's team has not been made public but the carrying value of the
fixed assets on the Sugar Company's balance sheets was $1.8 billion at last published date in 2006.
The eight companies shortlisted to bid were: J. Wray and Nephew Limited, Jamaica; Energen Development Limited, Jamaica; Stirling Partners, Bahamas; Damphur Sugar Mills, India; Angostura Limited, Trinidad; Coimex Group, Brazil; Infinity Bio-Energy, Brazil; and Flo Sun, United States.
Leeway unclear
But up to yesterday, it remained unclear what leeway, if any, had been allowed Angostura and its related company J Wray and Nephew, after instructions were issued that the two would not be allowed to tender separate bids.
Informed sources say the sugar negotiating team responsible for managing the divestment process had advised the parties to decide which of them would move forward with an offer after Angostura's takeover of Wray and Nephew's parent Lascelles deMercado.
The SNT, chaired by former banker Aubyn Hill, was scheduled to begin evaluating the bids February 18. The SNT secretariat told The Financial Gleaner that Prime Minister Bruce Golding was due to make a statement on the bids, and that Hill would therefore not be answering queries submitted to the office this week.
Requests for comment from William McConnell, managing director of Lascelles, and Angostura's Port of Spain office also went unanswered.
Chairman of the All-Island Jamaica Cane Farmers Association (AIJCF), Allan Rickards told the Financial Gleaner that it was he who had raised concerns about both Angostura and Wray Nephew being among the bidders.
Assurance
Rickards said he had "an assurance coming out of a meeting with the prime minister and confirmed by the chairman of the negotiating team that Angostura and Wray and Nephew will have to decide which of them is going to bid; but not both of them."
The AIJCF chairman said he was particularly impressed by Brazil's Infinity Bio-Energy, the most efficient sugar producer — whose factories produce sugar at US nine cents per pound — in that South American country.
Infinity, he said, was a modern and dynamic company, which had the resources to turn around the fortunes of the sugar industry here. Jamaica currently produces sugar at 25-27 US cents per pound, much higher than the 9 -11 US cents that the commodity fetches on the world market.
john.myers@gleanerjm.com
Terms of the SCJ divestment:
Cane lands and great houses will be leased for 50 years.
Factories, equipment, rolling stock and lands on which they are situated will be sold.
The Government is to absorb redundancy costs.
SCJ's debt will be transferred to the ministry of finance and the public service.
New owners will be contractually obliged to supply Jamaica's sugar quota to the European Union at least up to 2009 when the sugar protocol expires.
Lands earmarked for social housing will be excluded from divestment package.
