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Why is Atlantic Bank more worthy of BSI ownership than the cane farmers?

LettersWhy is Atlantic Bank more worthy of BSI ownership than the cane farmers?
September 25, 2011                                                                   
Dear Editor,
           
As we become 30 years old as an Independent nation, it behooves us to reflect upon our journey to assess how far we have come and if we are going in the right direction. One of the pressing urgent issues that faces us is the future of the sugar industry of Belize. And amidst all the facts, misleading statements and lies that have been pervading the discussion, we must focus clearly and decide firmly on what is best for the development of Belize and Belizeans.
   
In November of 2010, the management of Belize Sugar Industries Limited (BSI) admitted that they were in a financial crisis and that they did not have finances to pay the third payment that was due the cane farmers, and neither did they have the finances necessary to begin the 2010/2011 cane crop operations. GOB lent BSI 10 million dollars and Tate and Lyle lent BSI another 10 million dollars. 
           
Later, through the media, the Belizean public learnt that the Atlantic Bank group (AB) was interested in replacing ING bank as a main lender to BSI. Even though the Prime Minister had mentioned in an interview in February 2011 that AB did not only want to be a lender, but also wanted to participate in the ownership of BSI, the managers of BSI subsequently refuted such statement, in keeping with their position that the BSI managers were only seeking a lender to refinance their most urgent short-term loans. However, as time went by, in later interviews, the BSI managers began alluding to their quest for an investor.
           
As a consequence of BSI’s management’s changing their position from looking for a replacement lender to seeking a majority investor, the cane farmers at the General Assemblies of the Belize Cane Farmers Association (BCFA) of the 12th of June and again on 14th of August, 2011, resoundingly and unanimously passed and approved a resolution that the farmers want to be the majority owner of BSI, and they mandated the leadership of the BCFA to take all steps necessary to ensure such majority ownership, so that the sugar industry remains in the control and ownership of Belizeans with the Belizean farmers and BSI factory workers actively sharing and participating in the ownership and management of BSI.
           
On the 4th of July, the leadership of the BCFA received a draft proposal of AB’s offer which included that, upon paying BSI’s loan with ING Bank of US$20 million, AB would obtain 51% ownership of BSI and would engage in subsequent capital injections until AB obtains 75% of the ownership of BSI so as to achieve total effective control, mainly through a dilution of the shares of the current owners, of whom the BSI workers are the largest shareholder with 81.29%. In other words, the 81.29% of the BSI workers’ shares and ownership would be diluted firstly to about 40% and then subsequently to about 20%. This is so because two of the many conditions of AB are that AB can inject any amount of capital in BSI on one hand, and that the current shareholders will be refrained from exercising their stock right to purchase future share issues, on the other hand. In other words, AB would gain ownership and control of all BSI, including Belcogen and all their other lands and properties for only US$20 million.
   
On the 26th of August, the farmers received a letter of interest from the Sterling Group for a US$35 million investment. Then on the 31st of August, 2011, the Mexican capital arrangers visited Belize, the farmers representatives, the BSI workers, several government ministers and the engineering consultants hired by the farmers, and they confirmed that they have secured US$42.5 million through American Funds, which will be more than enough to pay off the pressing ING loan and to begin the 2011/2012 cane crop operations.
           
YET, the management of BSI continues to snub the farmers and to ridicule the farmers’ purchase offer. Why? Are the farmers not worthy and dignified to share the ownership of BSI along with the workers of BSI as Belizeans? Or do the BSI managers hold some prejudice against the farmers – whether racial, social or economic? Why is BSI management supporting the Honduran proposal without any substantial or justifiable reasoning? What is it that makes the Honduran Atlantic Bank group more worthy of ownership than the Belizean workers and farmers that have invested, toiled and laboured in this industry for over 50 years, in good times and in bad? Does the management of BSI expect the intelligent people of Belize to swallow the fallacy that because AB is a bank they have will have an unending source of money? Does the management of BSI expect the intelligent people of Belize to swallow the fallacy that because AB is a bank they will manage well and never go bankrupt? Why is it that while AB has admitted to syndicated financing, they have mentioned only one financial group – the Caribbean Development Bank- from where they will get US$20 million which, ironically, will be supported by a Government of Belize sovereign guarantee? Where will the rest of their money come from? Why is it that the managing director of BSI has been stating that only AB has submitted a concrete proposal, when on the 14th of September Mr. Earl Lopez of the BSI Employees Trust stated in an interview that the AB people admitted to them that they are still doing their due diligence? So is there a concrete proposal or is the due diligence still underway? Who is lying – BSI management or the Honduran AB group?
   
My fellow Belizeans, we must indeed reflect on the path we will take as a nation. While 40 years ago George Price succeeded in making Tate and Lyle divest itself of its lands so that the lands go back into the hands of the Belizean cane farmers, today we face the danger that if the AB proposal succeeds, then we will revert to over 40 years ago where one Central American latifundista group will control most of the lands, most of the production, all of the operations and all of the marketing and sales; with us Belizeans going backwards from being part owners of the industry to enslaved employees of our foreign masters. 
   
Belizeans Reflect!!! Belizeans Unite!!!
 
Sincerely,
Ramon “Monchi” Cervantes
A Cane Farmer
Orange Walk Town
September 25, 2011

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