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GuySuCo racks up US$40M debt to local banks, creditors
– overseas bank refuse to lend money
The state-owned sugar company is finding major difficulty in obtaining short-term financing.
Yesterday, the Guyana Sugar Corporation (GuySuCo), currently facing a series of strikes across the country, announced that it owes $8B in short-term debt.
In fact, GuySuCo disclosed that it is unable to get working capital from a foreign bank, affecting the payment of Annual Production Incentives (API) to workers, which is the main reason for the strike.
GuySuCo has announced it is facing severe financial cash problems with an overseas bank unwilling to lend any money to bridge a shortage on working capital.
Moreover, the corporation is lagging way behind in its payments to creditors, which amounts to $3.2B. Local banks are owed $4.1B and advances from customers total around $700M.
“This is a significant amount owing and the Corporation is finding it very difficult to source additional short-term financing to meet its working capital requirements,” GuySuCo said in a statement.
The financial state of the company could only be reversed with increased sugar production and the sale of sugar. This option also appears problematic since sugar production for the year is way below expectation. The corporation did not say how far below expectations the production was.
Even though the strike has reduced GuySuCo’s productive days and resulted in the destruction of cane, adding to its financial challenges, the company said it would be paying production incentives to workers on March 16th.
Meanwhile, workers operating at Wales Sugar Estate have resumed duties in anticipation of their payments. Workers of Blairmont Estate and a section of Rose Hall Estate continue to strike.
In the past, similar strikes have been cited as one of the main reasons for GuySuCo’s low sugar production.
Last year, the company production was 237,000 tonnes, way below the 300,000 tonnes initially projected. This year’s projection has been set at 268,000 tonnes of sugar.
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