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A Government guarantee of $120 million has been approved for the Fiji Sugar Corporation.
This will allow the FSC to borrow short term to meet its working capital requirements from March 16, 2010 to May 31, 2012.
In his submission to Cabinet, the Prime Minister Commodore Voreqe Bainimarama said Government had earlier approved a guarantee for $70 million on May 5, 2009 and this will expire on May 31, 2010.
The FSC is now seeking an increase to this Government guarantee to $120 million to meet increased working capital deficit arising largely from high levels of capital expenditure associated with the Mill Upgrade Programme, and poor milling performance at the three larger mills due to commissioning issues associated with the newly upgraded plants.
The Prime Minister said that the FSC will need to borrow $30 million against this guarantee in early March 2010 to meet its working capital requirement and to make the third cane payment to the growers.
He said that an additional $20 million will be required in the early part of the 2010 crushing season to meet FSC’s operational expenditure and growers advance delivery payment before sugar proceeds for the 2010 crush begin to flow in.
