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ECONOMY | 03-01-2020 14:07

Banco Nación will fight Vicentín debt restructuring

Officials at state-owned bank have told agricultural company it needs to raise cash now. They’re also investigating a loan made to the company for irregularities, according to reports.

Argentina’s biggest bank plans to oppose any attempt by Vicentín SAIC to restructure its US$900 million of debt, saying the agricultural company must sell assets to pay down its obligations before seeking relief, according to people familiar with the matter.

Officials installed at state-owned Banco de la Nación by new President Alberto Fernández have told Vicentín it needs to raise the cash now. They’re also investigating a loan made to the company for irregularities, the people said, asking not to be identified discussing the private matter.

The hard-line stance toward one of the country’s biggest soybean exporters is in line with pledges from the leftist government that took over last month to take a less forgiving approach with businesses. Fernández has vowed to prioritise the needs of everyday citizens and eliminate the privileges that he says often accompanied back-door deals that favoured large corporations and the wealthy.

Banco Nación’s viewpoint is key because it’s the largest creditor for Vicentín, which last month missed a US$350-million payment to farmers amid an economic crisis in the agriculture-dependent country.

Banco Nación, then under the control of the former government, extended a credit line to cover the shortfall, according to the people familiar with the matter.

More money

In addition, Vicentín got a US$300 million unsecured loan from Banco Nación during the previous administration that was approved by the board but didn’t go through the bank’s lending department, according to the people. Officials are now investigating the circumstances of that loan, the people said.

Former chairman Javier González Fraga didn’t immediately reply to requests for comment.

Banco Nación’s press department declined to comment.

Vicentín’s external public relations firm in Argentina declined to comment on behalf of the company.

Eduardo Hecker and Matías Tombolini, appointed by President Alberto Fernández as the chairman and vice chairman of the bank, have ordered board members not to give any more unsecured loans without the approval of bank executives, according to the people familiar with the matter.

Hecker has met with at least one of Vicentín’s shareholders, Alberto Padoan, to tell him that the company would need to sell assets to pay debts.

Padoan said it wasn’t possible because the prices being offered right now are too low, the people said.

Hiring advisers

While Vicentín hasn’t stated publicly that it intends to restructure its debt, it has sent notes to the grain exchange in Rosario saying it’s working to find a solution to its financial stress. The agriculture firm hired Roberto Helbling, former head of Barclays Plc’s Argentine unit, as a financial adviser ahead of any debt talks, people close to the company said. The company also hired the firm Estudio Alegria, Buey Fernández, Fissore y Montemerlo as legal advisers along with DLA Piper, those people said.

Estudio Alegria didn’t immediately reply to efforts to seek comment. Helbling and DLA Piper declined to comment.

Vicentín raised some cash last month by selling a 16.7 percent stake in Renova, owner of Argentina’s biggest soybean-crushing plant, to its partner Glencore Plc, the world’s largest commodity trader, for an undisclosed price. Baar, Switzerland-based Glencore now has 66.7 percent of Renova with Vicentín holding the rest.

Apart from its stake in Renova, Vicentín owns a cotton unit, a port with the capacity to load 270 barges a year, a grape juice maker, a feedlot with 20,000 heads of cattle, a vineyard and a soybean, corn and sunflower cooking oil producer.

Based in Santa Fe Province, it is the biggest shipper of soybean meal and oil from Argentina, which is the world’s top exporter of the products used for animal feed and cooking.

Vicentín, which last year shipped out 5.3 million metric tons of soy meal and oil, according to public records, hasn’t yet filed any formal request to protect its assets at court, according to the external spokesman who handles the company’s press.

by Pablo González, Bloomberg

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