[Source: Parliament of the Republic of Fiji/ Facebook]

Parliament has approved that the government guarantees the Fiji Sugar Corporation Limited’s domestic borrowings from 1st August to 31st May 2028 for a guarantee limit of $75 million.

This follows a lengthy exchange between the government and the opposition MP.

The Minister for Economy, Aiyaz Sayed Khaiyum, had moved the motion.

Sayed-Khaiyum says FSC has been facing financial issues due to uncontrollable factors ranging from a spate of natural disasters, inconsistent world sugar prices, milling inefficiencies, non-renewal of leases and a decline in cane production.

He says FSC expects a turnaround for the 2023 financial year, which is the 2022 season, with an anticipated cane production of two million tonnes and sugar production of around 200,000 tonnes.

The Economy Minister added that FSC is expected to earn $239 million in revenue from sugar proceeds and molasses in the projected financial year.

Sayed-Khaiyum says in order to support the restructuring and financial turnaround, FSC requires additional funding support through a government guarantee.

”FSC requires additional funding support through a guarantee cover of $75 million for new borrowings and these are intended to be borrowed have already been approved by the Bank of the South Pacific for $50 m and another new borrowing of $25 m which is yet to be confirmed. The guarantee will be utilized to secure new borrowing to retire some of the expensive loans and support FSCs critical capital investment towards enhancement of operational performance.”

The parliament has also approved that FSC be exempted from paying the guarantee fee.