Or Don't Come at All

This Friday, September 30, 2011 - was supposed to mark a major transition for Belize's sugar industry - as this was the day when ING, the Dutch Bank was supposed to collect the 30 million US dollars from BSI.

As has been reported, BSI doesn't have the money and was looking for a strategic investor to bail them out.

But, as we have also reported, ING agreed to push back the due date on that loan for a year - giving BSI the luxury of having one way to sift through a number of corporate suitors.

But it's not that simple - ING requires that all sides re-commit to the memorandum of understanding, which was signed in November of last year.

That required government to give a 10 million dollar bailout loan to the industry while BSI, the Cane Farmers Association and the Sugar Industry Control Board committed to improving standards and having a near record year of production.

The good news for government this year is that it doesn't have to come up with ten million dollars this year - in fact, it doesn't have to come up with any money; it simply has to agree that it will forego all payments towards that loan for another year.

ING, on the other hand, will still get some payments made from BSI - even though it is a one year grace period.

All sides sat down at the Coastal Zone conference Room in the City today to publicly re-commit to the MOU - and PM Barrow took the opportunity to make it clear to the cane farmers that - in terms of their quest to buy over BSI - they'd better come good, or don't come at all!

First, though, he discussed the need for the MOU:

Prime Minister Dean Barrow - Prime Minister of Belize
"What we are signing is an extension of the MOU that was signed last year. We're signing it for 2 reasons, because it was a good MOU, and it produced the best crop in years, but also because ING would not extend their forbearance except, we were able to re-sign the MOU, and except Government was able to push back the repayment due on Government's $10 million."

Joey Montalvo - CEO, BSI
"It is a grace-period. We have committed to bringing the level of the facility down to certain levels, and that is going to one of the conditions. We have, in fact as of now, met those conditions, and we're just a couple of days away from the 30th of September. But it means bringing down the facility to levels that are acceptable to ING."

Prime Minister Dean Barrow
"It's only us who aren't getting paid, you know. You realize that BSI is bringing down the ING facility. The only entity that's due money, that has payment postponed completely, is the Government of Belize. I hope that is absolutely clear, and remain so to the public. And in terms of going forward, this is a window of a year. Something has to happen that year, because if there is no strategic investor who comes in, ING will pull the plug, and then there will be no cane farming industry. We're happy to postpone our repayment. We are the only entity, as I said, not being paid anything this year, in accordance with our schedule, but we gladly do that because of the breathing space that is procured thereby. But people need to get real. The Government of Belize is out $10 million, which means that the people of Belize are out $10 million. And the people of Belize need to repaid. I would leave it there."

Jules Vasquez
"It's not a -"

Prime Minister Dean Barrow
"It's not a gift."

Jules Vasquez
"Because excising it might sweeten the pot."

Prime Minister Dean Barrow
"It is not a gift. I don't have the authority - I didn't go to the House for the authority to gift that $10 million. It was to lend $10 million, and I am in no position to convert that loan into a gift. So, that remains a loan. Now, I have already said, if the BSCFA can produce the level of funding that is required, and if employees and the factory want, in fact, to enter into that sort of a relationship with BSCFA as the strategic investor - hallelujah. But the monies have got to come."

Fred Ortega - Chairman, BSCFA
"What we are looking for is an equal opportunity, as other groups within the sector, to move to the step on the ladder where we want to go. Whosoever comes to be the strategic partnership - I think we as the BSCFA, as the leadership - we would need to negotiate certain benefits and conditions in favor of the farmers."

Prime Minister Dean Barrow
"While it would be lovely if the BSCFA can do it - if they can't, and somebody else has to do it - the BSCFA needs to accept that, and to go along with that, otherwise, there will be no industry. If time is beginning to run out, and for some reason, the BSCFA is not able to put this deal together or if for some reason BSI and their workers, and their holdings trust, don't prefer to go with another offer, Government will act. And farmers need to understand that. We want to act in concert with the farmers, but we will act to save the industry if it comes to that, in spite of what might be a sub-grouping of farmers, who may be saying, 'Well it's either the BSCFA who owns this thing, or nothing.' No man, the larger interest of the industry, the larger interest of the economy, and the larger interest of the country cannot accept that kind of opposition."

And while government has made clear that it will only countenance serious suitors, we also pointed out to the PM that 2012 is - for all intents and purposes - an election year, when politicians are often pressed to make popular compromises.

We note, though, that he shrugged that off, sticking to his line that he will make the right decision for the industry.

Channel 7