Posted: Tuesday, February 18, 2014. 2:41 am CST.
AARON HUMES Reporting: Today Prime Minister Dean Barrow announced that the Social Security Board (SSB) has been recruited as a partner to free up needed capital for Citrus Products of Belize Limited (CPBL) to pay growers overdue payments.
It comes amid growing financial problems for CPBL, whose two factories last week were on the verge of closing their doors to deliveries from growers as capital continued to be withheld by major banks First Caribbean International Bank and Heritage Bank.
As it was forced to do a few years ago with sugar, one of the “Big Three” industries along with citrus and bananas, Government has been asked and agreed to step in.
FCIB is to release needed capital to CPBL and in return the CGA is to swap 10% of its share capital in CPBL to SSB, replacing a $9.1 million loan facility reached several years ago.
This gives Banks Holdings of Barbados a plurality of shares along with continued veto power over decisions of the CPBL board, but that board will be reduced to seven members from nine and incorporate the new shareholders.
The Government is putting its foot into an industry that is known for its ability to disagree on the slightest of matters.
Nonetheless, PM Barrow says he is confident that even if the two sides cannot be made to agree, the more immediate issue of payments to growers will be addressed.
At 7% rate of return, he said, its “the best deal in town” for SSB, which must have its investment committee and general board led by Doug Singh give final approval.
By moving now, the Government hopes to avoid receivership of the company which would be bad news for all sides in a time when citrus prices are high and rising. But the P.M. shut the door on a Government-led buyout of all Banks shares, saying public funds would not be used in any circumstances for that venture on principle.
CGA will not actually receive any money in the transaction.
Tony King, chairman of Banks Holdings, flew into Belize today and will meet in Belmopan with stakeholders on Tuesday for final details.
A new CPBL board would see seven directors, two from each major shareholder one or two from SSB and the Government and a seventh to be named.
Not addressed today was whether the two sides were able to agree on the choice of an auditor for CPBL, the issue that precipitated the crisis.
It got a passing mention from the Prime Minister who indicated that CGA’s choice did not meet with Banks’ favour. And what happens to current director and CEO of CPBL Henry Canton?
The P.M. said today that his fate will be discussed at Tuesday’s meeting in Belmopan but hinted that a “fresh start” was needed.
The Prime Minister also said that Government will endeavour to repay a $2 million credit from the General Sales Tax Department (GST) to CPBL, which the CGA cited as a possible source of payment for growers – those payments average about a million per week.
The issue of citrus greening is also a concern.
The Prime Minister said additional help and investment would be provided by his Government, but in more urgent concerns Deputy Prime Minister and Minister of Agriculture, Gaspar Vega, says there will be an effort to clean up illegal nurseries that are suspected breeding grounds for the pest.
Notably present at today’s meeting was William Bowman representing Belize Citrus Mutual, the breakaway group of large growers that has gone as far as to suggest a split in the industry.
But in a time of crisis, his CGA counterpart Denzil Jenkins told the gathering today, all hands are needed on deck.
It is not known if the proposal will be taken back to CGA members for approval though at the last consultation session growers agreed to let CGA’s representatives handle the matter as they saw fit.
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