“History must record when it is read that at this time of crisis and at this juncture in the saga of this crisis that it was the government of the Honorable Prime Minister and a UDP government that stepped in and put us on a footing forward…” – Citrus Grower and Former PUP Belmopan Mayor Anthony Chanona
Telecommunications, water and sewer services, electricity, sugar, aquaculture, tourism, construction, banking… These are only some of the industries that Prime Minister Barrow and the United Democratic Party Government have saved in less than six years in office. The most recent industry to have been rescued from the brink of collapse is the citrus industry.
Late last week the management of the Citrus Products of Belize Limited reached out to Prime Minister Barrow because it was experiencing difficulty generating enough working capital to keep the factory open. That would have signaled the painful death of the entire citrus industry. Prime Minister Barrow was already planning to mediate negotiations between the key stakeholders in the industry in an effort to dissolve long standing disputes between parties. However, after learning that the industry was clinging to the edge, Prime Minister Barrow said, “The pace of the negotiations I have been seeking to conduct with the various parties naturally quicken, became absolutely urgent.”
The working capital for CPBL dried up after the commercial banks decided not to release any more money until the company can provide audited figures of its operations. CPBL has been unable to provide such figures because Banks Holdings Limited, which is the minority shareholder in the company, has used its veto power to reject the Board’s appointment of a new auditor. That impasse has made it impossible for a proper audit to be conducted resulting in the banks’ decision to freeze funding. Prime Minister Barrow convened emergency meetings and teleconferences all of last week and weekend to bring all stakeholders to the table. By Monday, February 17th, the crisis was solved, in theory, and the stakeholders of the citrus industry held a press conference to share the details of their agreed upon proposal.
After meeting with Prime Minister Barrow, First Caribbean International Bank agreed to forward $2 million to CPBL so that operations can continue at the factory. Government will then provide financing for the buyout of CPBL’s US$6.5 million loan with First Caribbean International Bank. Pending Board approval, the Social Security Board will then assume that loan. PM Barrow says it is an excellent opportunity for Social Security Board because the First Caribbean loan is being serviced and the interest rate is around seven percent.
Social Security Board will also become a shareholder in the company. The Citrus Growers Association is the majority shareholder in CPBL with 51 percent of the shares. The Association is indebted to Social Security Board to the tune of $9.1 million. Social Security Board is prepared to accept an offer of ten percent of the shares of the company as payment for the $9.1 million. The agreement will include a buy back clause in the event that the Association wishes to reacquire its shares. PM Barrow stressed, “No money is being given to the CGA. This is a credit facility for the benefit of the industry.” Therefore, the new share split will be 46.5 percent for Banks Holdings Limited, 41 percent for the Citrus Growers Association, 10 percent for the Social Security Board and 2.5 percent for other small shareholders. The Board of Directors for the company will also be reconfigured. Instead of 9, there will be 7 Directors: 2 from the Citrus Growers Association, 2 from Banks Holdings Limited, 1 from Social Security Board, 1 from Heritage Bank and 1 from the Government of Belize.
Anthony King, Chairman of the Board of Banks Holdings Limited, arrived in Belize on Monday afternoon and met with Prime Minister Barrow. Speaking of the proposal outlined by Prime Minister Barrow, King said, “I think everyone is quite content that we have found a way forward; certainly Banks Holdings is.” King and other stakeholders met with Deputy Prime Minister and Minister of Agriculture, Hon. Gaspar Vega on Tuesday, February 18th, in the Cabinet room. Vega said that all parties agreed on the proposals and they were able to address the way forward in the meeting. He said first and foremost the agenda is intent to secure a $4 million loan for CPBL so that small farmers can be paid what is owed to them for their fruits. Vega said, “Everything went well; I believe that it is the beginning of prosperity in the industry.”
Prime Minister Barrow said at the press conference on Monday, “I believe in the viability of this industry going forward and even as of right now prices are excellent. This is a hundred year old industry that has stood the test of time.” Anthony Chanona, former Chairman of the Citrus Growers Association, thanked Prime Minister Barrow for his intervention and said, “It’s up to us [in the industry] now.”
