Last week, the factories in the Pomona Valley were threatening to stop taking 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.
Following meetings and conferences over the weekend with key players, Prime Minister Dean Barrow announced today 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.
“The proposal is that FCIB will advance within limits of their overall facility with CPBL the immediate working capitals necessary to get us out of the pickle that we are in terms of the inability of the factory to pay for fruit”.
Essentially, by swapping an already due pair of loans to the Citrus Growers Association (CGA) for 10% of shares in CPBL, 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.
Prime Minister Dean Barrow: “We are positive that with proper operational control of CPBL, (I am not going to say proper management because I am not going to get whether the current management is working good or bad), but we are confident that with the fresh start and with what government is going to do at the back-end in terms of investing in the industry, that citrus will be extremely profitable; that CPBL will make money and so that the facility which government will take over and hopefully thereafter SSB that facility will earn serious interest for SSB”.
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 why not a buy-out once and for all time? The Prime Minister says in this instance he would not agree on principle.
Prime Minister Dean Barrow: “I think that, judging from the question and from the story that you aired, you are confusing two things. We all know that there is a desire( CJ will say, an intention for them to purchase the Banks Share Holdings Limited shareholdings. Now. That may well be a consummation devotedly to be wished, and they had approached me for government to assist with the purchase price. I Absolutely and flatly refused. I don’t think that government has any right to give public funds to what is I fact … CJ is this hybrid, it’s an association but you have to treat it like in certainly as a private sector entity”.
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.