Motion for Govt to provide a $75m guarantee on FSC’s domestic borrowings passed in Parliament

Motion for Govt to provide a $75m guarantee on FSC’s domestic borrowings passed in Parliament

Photo:Parliament of the Republic of Fiji

The motion for Parliament to approve a Government guarantee of $75 million to Fiji Sugar Corporation’s domestic borrowings from 1st August 2022 to 31st May 2028 and endorse that FSC be exempted from paying the guarantee fee has been passed.

Prime Minister and Minister for Sugar Voreqe Bainimarama says the Fiji Sugar Corporation is expecting a turnaround for the 2023 financial year reflecting the 2022 season.

Bainimarama says FSC anticipates cane production of 2 million tonnes and sugar make of around 200,000 tonnes.

He adds that FSC expects $239 million in total revenue from sugar proceeds and molasses in the projected financial year.

Bainimarama says they also ensured farmers will get the guaranteed $85 per tonne.

National Federation Party Leader Professor Biman Prasad has supported the Government to provide the guarantee to FSC.

Professor Prasad says without pumping taxpayers money, FSC is technically insolvent.

He says sugar cane production declined from 3.2 million tonnes in 2006 to 1.4 miiion tonnes in 2021.

Prasad says the last two annual reports, 2019 and 2020 contains comprehensive audit of FSC clearly saying the ability to continue as a going concern, which is a very important point.

He adds this is apart from the $173.8 million that Government had written off from FSC's debt register by converting it into liquidity.

Prasad further clarifies if one were to sell FSC, it still would not be able to clear it’s debt because the portfolio is $317 million more than it’s assets.

Attorney General Aiyaz Sayed-Khaiyum says FSC is experiencing financial issues, attributed mainly to various uncontrollable factors such as natural disasters, inconsistent world sugar price, milling inefficiencies, non-renewal of leases, declining cane production and deteriorating cane quality.

Sayed-Khaiyum says FSC expects a turnaround for the 2023 financial year with anticipated cane production of 2 million tonnes and sugar production of around 200,000 tonnes.

He says as a result $239 million of revenue is expected from sugar proceeds and molasses in the projected financial year.

He says in order to support the restructure and the financial turnaround, FSC requires additional funding support through Government guarantee.

The Attorney General says for the continuity and viability of FSC, the management with the assistance of the Board has developed appropriate action plans to stabilize cane production and overall mill operations.

Opposition Leader, Ratu Naiqama Lalabalavu says a lot of importance needs to be placed on the sugar industry as a huge part of the population relies on it.

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