Minister of Agriculture Dr Christopher Tufton (right) on a tour of the cane fields at Frome Estate, Westmoreland, in this November 2007 file photo. His guide is Aston Smith, SCJ vice-president of operations. - File

Government has failed in its effort to offload the loss-making Sugar Company of Jamaica (SCJ) as a single entity, Wednesday Business sources have confirmed.

The assets of the five state-owned sugar factories that make up the SCJ are now expected to be sold off to what has been described as a "priority four investors".

But the other proposals have been thrown out because of what sources close to the talks say are unreasonable demands, including a request for the Government to hand over the equivalent of $36 billion in aid for infrastructure development.

The shortlisted four are said to be:

A conglomerate that includes the Hussey family and American partners who are going after the Long Pond and Hampden Estates in Trelawny; Energen Corporation, based in the United States, for the Petrojam Ethanol facility and Bernard Lodge, Innswood, Monymusk estates in Clarendon; Italians Eridania Sadam, which wants to buy Frome estate in Westmoreland; and Jamaica's Fred M. Jones, in partnership with Seprod Limited, has sights on the Duckenfield estate in St Thomas.

Eridana is reportedly interested in Frome for the production of granulated sugar.

It's not clear how many expressions of interest the Government got in this second attempt at selling off the SCJ assets - sources close to the talks say it was at least seven but involved 14 companies.

"One group needed a portion of land to expand, but was requesting aid of €300 million, €100 million for roads and €200 million for (other) infrastructure, and the government is on record as saying that the State doesn't have any money, so whoever is coming must be prepared to spend," said an industry source.

"So, in some cases it is not a matter of their track record, history, or the fact that they are a local entity - even though that would give them an advantage, it cannot be at any cost."

Worthy Park Estates, a private sugar producer in Clarendon, was said to be among those vying for infrastructure support.

A misunderstanding

Managing Director Peter McConnell said, however, that the request was misinterpreted.

"It's a misunderstanding, that's all I can say, " McConnell told Wednesday Business last night. "There are certain things that we require the Government to do to make the thing work, but I am not sure they fully understand the request ... and that's all I will say for now."

The Golding administration is being careful not to repeat the mistakes it made in its most recent attempt to get rid of the SCJ, which has racked up more than $21 billion in debts and losses in the region of $18.2 billion since 2005.

In the previous attempt, selected bidder Infinity BioEnergy of Brazil, a consortium of venture capital partners, was unable to muster the US$125 million required to pick up the SCJ and Petrojam Ethanol Limited, the Government's profitable, 60-million-gallon-a-year fuel grade refinery that was thrown in as a sweetener to the deal.

Early purchase

Neither Agriculture Minister Christopher Tufton nor Government's lead negotiator Aubyn Hill was prepared to speak officially on the negotiations while the divestment was still under way.

Fred Jones was also reached but he, too, said he was unprepared to speak. Efforts to speak with the Husseys and the overseas parties were unsuccessful.

Still, even with the first hurdle of the shortlisting cleared, a legal sticking point remains over the sale of Hampden.

An ex parte injunction now prevents the Government and its agents - including the SCJ, receiver John Lee and the Trelawny Sugar Company of Jamaica - from selling or transferring those assets. It expires on May 19.

Hampden, which was owned and operated by David Farquharson and his family, went into receivership in 1999 after it was taken over by state-owned bailout company, Finsac, under the rescue of the financial sector.

A lawsuit filed by the Farquharsons is pending in the Supreme Court regarding the takeover of the estate by Finsac.

Due diligence on the preferred four SCJ bidders is said to be continuing.

mark.titus@gleanerjm.com