24th May 2018
Source: News Room
The National Industrial and Commercial Investments Limited (NICIL) expects to raise US$65,000,000 within the next few months through a combination of local and regional investors, including those in Trinidad and Jamaica.
News Room learnt that the funds raised are to be used towards GuySuCo’s capital expenditure and general operations.
Also, a targeted roadshow is expected to be launched within the coming weeks to raise the remaining amounts.
Guyana aggressively reentered the capital markets arena with NICIL issuing the first tranche of a US$150,000,000 bond arranged by Republic Bank Limited exclusively through its Investment Banking Division. This transaction of roughly G$17 billion or US$85,000,000 equivalent is being disbursed on May 24, 2018, with the residual tranche to be issued to NICIL as is needed.
The Government Guaranteed bond has been issued for a five-year term with a rate of return of 4.75 percent per annum. NICIL’s team led by Colvin Health London, the head of its Special Purpose Unit (SPU), structured the bond to recapitalize GuySuCo’s operations.
The SPU was created to divest GuySuCo’s resources.
Historically, GuySuCo on its own has struggled to raise the funds needed to revamp its operations. However, under the stewardship of Mr. Heath-London, the transaction was crafted so that NICIL, through the support of the Government of Guyana, issued the facility, avoiding the pitfalls associated with investors’ reluctance to support a poorly managed Guysuco.
The bond was oversubscribed by the Guyana local investor market shortly after its announcement.
Even more impressive is that through the Government’s local content mandate, the transaction was consummated entirely using Guyanese companies and local legal counsel, Hand in Hand Trust Corporation acting as Trustee, Guyana Americas Merchant Bank Inc as paying agent, the Attorney General representing the Government of Guyana, NICIL represented by its In House counsel A. Mclean, the Ministry of Finance through its debt management team, and Republic Bank Limited represented by Devindra Kissoon of London House Chambers, demonstrating the capacity of Guyanese to handle these sophisticated transactions, a positive sign of things to come.
Republic Bank was able to successfully tap the local investor market to raise mutually beneficial financing for the Guyana Government and investing subscribers.