Examination of witnesses (Questions 440
- 448)
TUESDAY 3 FEBRUARY 1998
MR JOHN
ELLIS, MR
BERNARD CORNIBERT,
MR JUNIOR
LODGE and MR
GORDON MYERS
440. What do you call it?
(Mr Cornibert) It has disappeared. This is now
Wibdeco, but it is Geest Bananas over here which is the company
which was acquired jointly by Fyffes and Wibdeco.
441. That still remains?
(Mr Cornibert) That is still there. It still operates
as Geest Bananas. However, it no longer performs any role down
in the Caribbean, in the Windward Islands. That role has been
taken over by Wibdeco. Let me explain. As part of our strategy
for securing the long-term future of the banana industry in the
Windward Islands, we thought, and we had to be realistic, that
no company was going to get in the business of marketing bananas
for producers and not in the long term make some kind of profit.
Therefore, if someone is going to make a profit off the bananas,
why not the producers? We have always had a long-term objective
of securing, if not wholly, at least partly, a share of the business
downstream. We think perhaps we are the only small producers in
the banana-producing world that have achieved that as an objective.
However, we did that with absolutely no money. We did not have
a penny to acquire the Geest banana business, and, therefore,
we had to borrow to do that. If you borrow, there is going to
be a pay-back day and we have to pay back now. We have done that—we
have secured the business for the banana producers in the Windward
Islands. If we had had the money at the time of acquisition, we
would have used it to buy the business and all the dividends,
all the cash being generated now, would have flowed back to the
growers. Unfortunately, this is not happening now because we have
to pay back the loans that we took out in order to acquire the
company.
442. What is the pay-back period?
(Mr Cornibert) Five years. It is pretty onerous,
but that is what we could negotiate at the time.
443. So of the £2 million dividend,
did Wibdeco receive a million?
(Mr Cornibert) No, £4 million was paid out
in dividend and Wibdeco received £2 million, but again we
have a very onerous loan on our backs.
444. How much of that £2 million then
after paying your financing costs was available for the farmers?
(Mr Cornibert) None at all. In fact we had to
top it up.
445. Really?
(Mr Cornibert) Yes.
446. So this new arrangement is not yet
benefitting the farmers?
(Mr Cornibert) I like the word "yet".
It is not yet because we have always said that this was not a
short-term investment, but it was an investment for the future
and, as I said, for the moment we have in fact up to this point
almost cleared half of the total loan, which is quite an achievement.
447. It makes it even more important that
this regime continues, does it not, to the farmers of the Windward
Islands?
(Mr Cornibert) That is right because the benefits
that will be derived from the acquisition of that company will
come later on after we have paid all the loans and the company
itself has cleared its debts and is in a position where it can
pay out on a regular basis dividends to Wibdeco which can be passed
directly to the farmers because the shareholders of Wibdeco are
the banana growers' associations.
448. You have helped us hugely this morning
in understanding the position you are in. We have to conclude
this session because we have already kept our next guests waiting
overlong. Thank you very much indeed for coming and for all the
evidence you have given us and the papers, I think, Mr Myers is
going to send us to elaborate further the matter. Thank you very
much for your evidence.
(Mr Ellis) Thank you for your interest and time.
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