Govt guarantee approved for FSC

Cabinet has approved a Government Guarantee of $120 million to the Fiji Sugar Corporation to allow the FSC to borrow short term to meet it's working capital requirements from 16th March this year to 31st May 2012.

The government guarantee has been approved based on a submission by Prime Minister Commodore Voreqe Bainimarama.

The Prime Minister said the government on May 5th last year, approved a government guarantee of $70 million to FSC, which expires on May 31st this year.

Commodore Bainimarama said the FSC is now seeking an increase to the government guarantee to $120 million to meet the increased working capital deficit arising largely from high levels of capital expenditure associated with the Mill Upgrade Programme, and poor milling performance at the larger mills due to commissioning issues associated with the newly upgraded plants.

Commodore Bainimarama also reveals that the FSC will need to borrow $30 million against this guarantee this month to meet the working capital requirement and to make the third cane payment to the growers.

He said an additional $20 million will be required in the early part of the crushing season to meet FSC's operational expenditure and growers advance delivery payment before sugar proceeds for the 2010 crush begin to flow in.