The firm that was once the crown jewel of Argentine soy processing risks going out of business altogether if a US$1.3-billion rescue deal is rejected.
Vicentin SAIC, which has been battling an Argentine court to get the plan approved, would struggle to survive if it’s forced into a process allowing other parties to put forward proposals to secure its future, said Estanislao Bougain, a board member.
Approving the restructuring plan led by crop traders Bunge Global SA and Glencore-backed Viterra Inc is key to avoiding the so-called cramdown, he said.
“Vicentin doesn’t have have the funding to survive a cramdown because it’s a long process,” Bougain said in an interview at Bloomberg’s Buenos Aires office this week.
The company, once the largest soybean processor in Argentina, plunged into bankruptcy almost four years ago after failing to meet a US$350-million payment owed to suppliers. Since then, it has faced threats of nationalisation and accusations of fraud by international lenders.
To make matters worse, Vicentin is now fighting a lengthy court battle to get its restructuring plan approved. An appeals court in Santa Fe Province — where Vicentin is based — is currently considering whether to overturn a ruling to reject the plan.
Should it uphold the judge’s decision, the case would move to cramdown, which would strip Vicentin off crucial agreements that have kept some money flowing in by allowing Bunge, Viterra and a local cooperative to use its processing plants.
The company is already suffering after a brutal drought left soybean processors in Argentina short of crops.
It’s unclear whether Bunge, Viterra and the cooperative, ACA, would continue to support a rescue deal in a cramdown, Bougain said.
In the few days that the cramdown was technically open — between the first judge’s ruling and the intervention by the appeals court — no entities expressed an official interest in taking part, he said.
Vicentin expects the appeals court to rule on whether to approve the Bunge-Viterra-led rescue, or proceed to cramdown at some point after Argentina’s presidential election on Nov. 19.
by Jonathan Gilbert & Isis Almeida, Bloomberg
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