The contents of a recently formalized Memorandum of Understanding (MoU) – designed primarily to stabilize the finances and streamline the board of directors of citrus processor, Citrus Products of Belize Ltd. (CPBL) – was discussed at a press conference held this morning by Prime Minister Dean Barrow at the Biltmore Plaza Hotel in Belize City.

After being on hold for roughly one week due to last-minute scrutiny by legal representatives of all parties concerned, including the Citrus Growers Association (CGA), Banks Holdings Ltd. (BHL), First Caribbean International Bank (FCIB), the Government of Belize (GOB) and the Social Security Board (SSB), the proposal was officially inked yesterday, Thursday, February 27, in an effort to propel the embattled citrus industry forward.

According to Prime Minister Barrow, a renewed governance structure should serve to ease contentions resulting from a long-standing impasse within the industry which, if not completely resolved, will hopefully be closer to a much-needed resolution, thus removing the crippling bottleneck which has left the industry in limbo.

Barrow said, “The governing structure for CPBL is now going to change. The CPBL board will now consist of 2 persons nominated by CGA through its investment company, ICL – in effect 2 persons to be nominated by BHL; one person to be nominated by Heritage Bank; one person to be nominated by SSB and one person – independent and impartial – to be nominated by GOB after consultation with both CGA and BHL.

“Together, CGA and BHL will have 4, and there is a triumvirate of SSB, Heritage and GOB with 3, so that if there’s any alliance of forces between CGA and BHL, they [CGA and BHL] would still be able to outvote the other 3, but I suspect that it will be a cold day in hell before we ever see alliance between CGA and BHL.”

Barrow stated that while there was a great deal of back-and-forth during the negotiations, there is a genuine interest on the part of both the equity stakeholders, i.e. BHL and CGA, to forge a way forward, and that there is the recognition that both sides either “hang together or hang separately.”

If there is a resurgence of the disputation between BHL and CGA, which would lead to further immobilization of CPBL or the industry, then Barrow explained that GOB will be forced to step in and take reigns via a receivership clause.

He said: “The understanding is that Government, or ultimately SSB together with the other lender Heritage Bank, would be in a position to pull the trigger then on receivership, and take the [CPBL] company completely out of any sphere of influence of either of the two major shareholders.”

Aside from the restructuring of the CPBL board, negotiations were focused on finalizing the availability of working capital to CPBL so that citrus farmers could finally be paid for produce that had been delivered to the processing plant some time ago.

Eleven days ago, GOB announced its decision to decisively step in and assume FCIB’s 15-million-dollar loan to CPBL by the end of March, while infusing another 4 million dollars to alleviate the current cash flow crisis.

Today, PM Barrow assured skeptics that there was no need for concern as it relates to CPBL’s ability to repay the funds. “We expect that when SSB purchases the $15 million loan facility from FCIB, it will at the same time, purchase the additional $4 million that government is now lending by way of working capital so that the exposure of SSB ultimately will be something like $19 million,” he said.

“But we repeat,” Barrow went on to note, “the FCIB loan is being serviced, the Heritage [Bank] loan is being serviced – there is no need in my view for any undue concern from those who have a legitimate concern about the proper stewardship of SSB monies, which are public funds. The historical record shows that CPBL has not been in any difficulty insofar as servicing these loans are concerned, and we expect that going forward, CPBL will find itself in an even more robust, profitable and successful position under the stewardship of the new Board”.

The chairman of the SSB, Doug Singh, outlined the process with respect to the involvement of his organization, which through its various subcommittees, will be tasked with making a decision to approve whether a recommended conversion of debt to equity will be feasible.

Singh said, “Those loans now – on the request of CGA – are being considered to be converted into shares of what CGA owns via its investment company in the factories. The process going forward is for the Investment Committee of SSB to look at the loan before making a recommendation whether or not to recommend it to the Board of Directors.”

“In accordance with the Social Security Act, there are two bodies; the Investment Committee, which has its own chairman – it’s an independent body that has its own representatives from the private sector and the unions, and there is the Board of Directors of Social Security that has no representation on that committee. They are absolutely separate.”

“That was done intentionally for transparency”, Singh said, “so that loans and transactions can be approved on their own merits and not with the influence of one body to the other. The [SSB] Board [of Directors] will, thereafter look at the loan and decide where it goes with it.”

Though grateful that progress has emerged for this critical national industry, chairman of the CGA’s Investment Company Ltd. (ICL), Denzil Jenkins, gave the grim reminder that the MoU falls short of the expectations of many citrus growers.

“If we [CGA] were designing the solution to the problem, it would not be as it is today. But when you are sailing in headwind, you have got to learn to make tacks”, Jenkins said.

He went on to describe the proposal as a profitable investment for SSB, declaring that “we want to seek to give comfort to the public, as we hear lots of expressions concerning the government using, they say, the ‘people’s money’ to rescue the citrus industry. The funds that are going to be used by SSB gives SSB the opportunity of earning – whereas putting that money at the commercial banks and earning, say 2.5 percent interest, there is the opportunity [for SSB to earn] at least, that’s a 6 percent interest, which is more than twice what SSB will be getting [by] putting its funds in the bank. Every dollar that goes into SSB today, tomorrow has a decreased value because of inflation, and so SSB needs to invest its funds with the best possible returns so that it will be in the best position down the road to meet the demands of the different Social Security benefits that it pats out.”

As to the fate of the controversial CEO of CPBL, Dr. Henry Canton, the Prime Minister bluntly said, “Quite sensibly, the MoU makes clear that this is a matter for the new [CPBL] Board to deal with. Banks Holdings, as I understand it, are not going to ‘sweat fever’ for anyone, [and] they are not vested in preserving the status quo, or else they would not have agreed to what they have agreed to.”

Another critical issue that currently befalls the citrus industry is the presence of the HLB disease (also known as citrus greening) – a deadly and infectious citrus disease, carried by a citrus psyllid, which threatens to topple Belize’s citrus industry, especially in the absence of a certified cure for its adverse effects.

The government has been criticized for its response in battling the disease, but today the Minister of Agriculture, Hon. Gaspar Vega, said that GOB is working along with CGA via the Belize Agricultural Health Authority (BAHA) to control the disease.

Vega stated, “At the moment, we have been working together with CGA ensuring that we get the right seedlings. BAHA is the body that polices that sector, and we are in talks now with CGA to see how much more enforcement we can put to ensure that we produce the proper seedlings to control the citrus greening.”

A host of citrus farmers – anxiously awaiting payments for their produce – were on hand for the press conference, and Amandala understands that the 4 million dollars in bridge financing to pay those arrears should be available by this Monday, March 3.