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Capital shortage avoided

SUVA, Fiji (Fiji Times, March 23, 2010) - The government has approved a guarantee of FJ$120 million [US$62.8 million] to the Fiji Sugar Corporation to allow the corporation to borrow short term to meet its working capital requirement until May 31, 2012.

Ministry of Finance permanent secretary John Prasad said that was approved during the Cabinet meeting last Thursday.

Mr. Prasad said the government guarantee would also give a high degree of comfort if any member of the public would want to buy shares in FSC.

He said the government had approved a government guarantee of $70m to FSC last year, which expired on May 31 this year.

"So the approval is the extension of what FSC already got," he said.

Prasad said FSC would need to borrow FJ$30 million [US$15.7 million] against this guarantee this month to meet the working capital requirement and to make the third cane payment to the growers.

He said an additional FJ$20 million [US$10.4 million] would be required in the early part of the crushing season to meet FSC's operational expenditure and growers advance delivery payment before sugar proceeds for the 2010 crushing season begin to flow in.

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