The $30B syndicated bond which the PPP/C Government has inherited from the former APNU+AFC administration, has so far forced the payment of a whopping $606M in just interest.
This was revealed today by Finance Minister Dr Ashni Singh during today’s sitting of the National Assembly.
The Finance Minister was asked how much of the $30B syndicated bond has been spent on the Guyana Sugar Corporation (GuySuCo) since August 2020.
According to Dr Singh, $17.5M of the $30M has been turned over from the trustees to the National industrial and Commercial Investments Limited (NICIL).
“A total of $17.478 Billion, net of trustee fees of $121 Million, has been disbursed by the bond holders to NICIL. Out of that amount, as at August 2 2020, amounts totaling $10.27 had been disbursed to GUYSUCO. As at December 31, 2020, amounts totaling $11.47 Billion had been disbursed to GuySuCo,” he said.
He also detailed how much of the bond the PPP government has serviced so far, including the payment of a whopping $606M in just interest.
According to the Finance Minister, the terms of the bond are locked in so as to prevent early repayment without penalty. The government therefore has little choice but to continue honouring the bond, which is backed by a government guarantee.
“This bond was concluded at an exorbitant interest rate of 4.75 per cent, considering it was backed by a government guarantee and they locked in that interest rate with a penalty clause for early repayment,” Dr Singh explained.
“And given the state in which the sugar industry was inherited after five years of neglect by the APNU+AFC, our government has expressed very clearly our commitment to revitalize the industry to support the achievement of a diversified and modern sugar industry. We have already started to take steps to recapitalize the industry.”
The bond, which was heavily criticised at the time by the then PPP opposition, was arranged by the Special Purpose Unit of NICIL back in 2018, and it was intended to recapitalise GuySuCo and return it to viability after the former APNU+AFC government had shut down four estates and placed thousands of sugar workers on the breadline.
The idea behind the borrowing of this syndicated bond was to assist the SPU with the reopening of the estates to prove to potential investors that they are viable. However, that plan never came to fruition.
