Guyana says it is unable to bail out the Guyana Sugar Corporation (GuySuCo) which last month said it would not survive through June without assistance.
Despite noting that it is actively seeking to assist GuySuCo with funds available to it, the David Granger-led Administration said it unable to provide a bailout due to prevailing national circumstances, coupled with the COVID-19 challenges and a reduced national income.
The disclosure was made via a Ministry of Finance statement yesterday, June 10, which shared that the Treasury was not able to meet the request of the corporation which operates three sugar estates.
The statement continued that a $30 billion bond was secured by the National Industrial Commercial Investments Limited (NICIL) to “retrofit and revitalise” the sugar estates.
Further, the ministry said approximately $9.7 billion was disbursed to GuySuCo to fund its capital and operational expenditure between July 2018 and February 2020; funds which fell outside of the bond agreement.
“Additionally, NICIL through the SPU (Special Purpose Unit) sold lands that were vested to it, and garnered deposits of $2.1 billion,” the statement continued. However, the ministry said the full sum was used to offset bond payments that became due in May.
A final $1.5 billion for the lands will be paid over to NICIL when the vesting orders are signed and gazette, the ministry said, adding that part of that figure will go towards bond repayment due next month. The remainder, however, will go towards GuySuCo, said the Finance ministry, which added that the corporation also generates its own income.
It ended that with another disbursement expected in days, the NICIL, GuySuco and its lenders should work to resolve cash flow restrictions.
In the letter addressed to President Granger and dated May 15, GuySuCo chairman John Dow pleaded for assistance for the corporation.
Dow said, “Our Finance Department estimates that the Corporation is expected to be out of cash by the 2nd week in June and until then we can only afford to meet labour, fuel, and cane farmers’ payments and the bare essentials (labour transport, lubricants, etc.”
GuySuCo employees some 10,000 people in its cultivation of sugarcane and sugar production.