The APNU+AFC Government says it is unable to bailout the Guyana Sugar Corporation (GuySuCo) which is on the brink of collapse and unsure of how it will survive the second week of June.
The Government officially responded to GuySuCo’s request for a bailout on Wednesday and made it clear that the national treasury is incapable of doing so at this time.
The Ministry of Finance in a statement on Wednesday evening said “the prevailing national circumstances, coupled with the challenges of COVID 19 and a reduced national income render the Treasury incapable of providing a bailout to GuySuCo.”
According to the statement, the Government is looking to access other funds available to the entity to help mitigate its present challenges.
The Ministry alluded to $1.5B which will be paid to the National Industrial Commercial Investments Limited (NICIL), when the vesting orders are signed and gazetted, for former sugar estate lands sold by the entity in early 2020.
“It is expected that part of this sum will go towards a bond repayment which is due on July 4th, 2020, and the remainder to GuySuCo.”
NICIL had secured a $30B bond to retrofit and revitalise the three remaining sugar estates in 2018.
The previous $2.1B received for the sale of estate lands, was used to offset bond payments that became due in May, 2020, the statement noted.
According to the Ministry, during the period July 2018 to February 2020, $9,720,759,568 was disbursed to the Sugar Corporation to fund its Capital and Operational Expenditure – “much of which was outside the terms of the bond.”
Another disbursement from the bond is expected in the coming days. In this regard, the Ministry urged that NICIL, GuySuCo and the syndicated lenders work assiduously to resolve any bottlenecks.
The Chairman of the GuySuCo Board of Directors in a letter to the President on May 15 said the Corporation will be unable to survive into the second week of June without a bailout.
GuySuCo’s chairman called on the President “…to use your good offices to arrange for funding to prevent the impending closure of the Industry”.
Some 10,000 workers are employed by the country’s three sugar estates.