Through a government guarantee of $120 million, the Fiji Sugar Corporation has been able to raise $85 million in loans from local institutions.

The FSC made a market announcement that it has secured a government guarantee of $120 million to raise funds for its working capital requirements.

FSC CEO Deo Saran confirmed that the announcement relates to the government guarantee announced earlier this year and they have so far managed to raise $85 million.

In March, Cabinet had endorsed a Government guarantee to the FSC to allow the FSC to borrow short term to meet its working capital requirements from March 16th 2010, to May 31st 2012.

Government on May 5th 2009 had approved a government guarantee for $70 million, which expired on May 31st 2010 before the FSC sought an increase to this Government guarantee to $120 million effective from March 16th 2010 to May 31st 2012.

This was 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 three larger mills due to commissioning issues associated with the newly upgraded plants.

Government was to have given $30 million to the FSC against this guarantee in early March this year to meet its working capital requirement and to make the third cane payment to the growers.

An additional $20 million was 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.

Saran said the guarantee would allow FSC to fund its capital requirements until 2012.


Story by: Roneel Lal