The Guyana Sugar Corporation (GuySuCo) has reached rock-bottom. The state-owned company is neck-deep in $2.1B debt, the cash in hand is barely enough to survive this week, and two of the entity’s accountants, Ramesh Persaud (Vice Chairman) and Paul Cheong ,felt obliged to resign. If GuySuCo does not get urgent cash injection, closure is certain says John Dow, Chairman of the GuySuCo Board. The official laid out the financial predicament of the industry in a letter to President, David Granger on May 15, last.
In the letter, Dow said he was mandated by the board to explain the crisis the organization is in and request intervention. Dow said that despite improvements in the productivity of cane, production for the last two crops has fallen short of expectations and the current COVID-19 pandemic has only exacerbated problems experienced in meeting the first crop for 2020. As a result of the cash generated, Dow said that operations would be difficult to continue.
The official said, “Our finance department estimates the corporation is expected to be out of cash in the second 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.).”
Further to this, the Chairman told the President that cash will not be available to meet any outgoings for spares and materials for mid-year Out-of-crop maintenance of factories. He said that this inability to purchase spares and materials is likely to result in factory performance for the second crop being adversely affected with increased factory downtime, reduced sucrose extraction at the milling plant, and lower sugar and molasses production.
Dow also informed the President of the $2.1B owed to creditors while noting that it is unlikely that these creditors will continue to grant further credit. “Indeed our ability to pay creditors in time has resulted in many of our most experienced contractors being unwilling to tender for GuySuCo projects and creditors have been demanding large up-front payments before supplying goods. If some of the creditors are paid, GuySuCo would be well out of cash before the second week of this month,” the Chairman said.
With the foregoing in mind, the official said that GuySuCo needs funds now to be able to survive after the second week in June.