Vicentin case: a frustrated trust and the strong refusal of Banco Nación

Last Thursday about twenty people, including representatives of companies wishing to take over Vicentin, notaries and officials of Banco de Valores, met at the headquarters of the ACA cooperative in Buenos Aires on Madero Avenue. Over there signed two trusts in order to secure the payment process of the largest private default since 2001.

It was 4:00 pm when all the contracts were ready, almost against time and prepared for the information hearing scheduled for this Friday 24th. At that time no one imagined what would happen next with the intervention of the Supreme Court of Justice in Santa Fe in that context.

The court decided suspend the terms and ask the bankruptcy judge to send him the procedure. He did so at the request of one of the country’s leading grain brokers, the Grassi firm, which he was trapped with millionaire credits.

One of the trusts, head of Banco de Valores, Argentina’s main financial trustee, is of Guarantee and hedge 95% of Vicentin’s shares to support payment commitments. The other is the administration.

Trusts are key in the complex preventive bankruptcy process thousands of creditors, thousands of employees, thousands of distressed producers and creditors and billions of pesos in liabilitiesas in the case of Vincentin.

Those who signed it are interested in Vicentin, the cooperative ACA, Viterra, the former Glencore and Bunge. The company’s proposal defaulted in December 2019 with a debt of $ 1,500 million is a cash payment of $ 297 million. Of that amount, $ 170 million would be in cash at a rate of $ 30,000 for each lender.

But there is a lot of noise. For the time being, Eduardo Hecker, president of Banco Nación, has commented that he has turned down a new payment proposal from a $ 20 million agribusiness company. “They owe us $ 300 million, it’s unacceptable “underlined a Clarione.

Hecker celebrates the Santa Fe court decision in hopes of a new proposal to creditors. He puts it this way: “Vicentin’s proposal involves validating the fraud ea it takes away 80 per cent of the net present value of the receivables held by Banco Nación and damage to the collective assets. Keeping in mind that Banco Nación belongs to the whole company and, therefore, validating this alternative is an attack on the collective assets “.

In his view, “the decision of the Provincial Supreme Court opens a phase in which a new proposal must be advanced which contemplates the interests of the various sectors, both public and private. This instance must contemplate the full operation of the company; which generates employment and which also generates alternatives for production and increases the added value “.

Another headache in this competition is the Ad Hoc Committee of International Creditors, which brings together international financial entities that have funded Vicentin and maintain unpaid debts of over $ 500 million. It is made up of IFC (International Finance Corporation, a member of the World Bank Group), FMO (Dutch State Controlled Development Bank), ING, Rabobank, Natixis and Credit Agricole. This committee of creditors is led by BMO, the 50% state-owned Dutch Development Bank, together with the cooperative Rabobank.

Meanwhile, doubts are growing about the Court’s decision on performance by judge Fabián Lorenzini which manages the millionaire creditors contest in Reconquista, the city of lapachos and jacarandá, northeast of Santa Fe and 620 kilometers from the city of Buenos Aires.

In Reconquista they have not yet awakened from what seems like a nightmare in the history of a company founded by the brothers Máximo, Pedro and Roberto, who arrived from Italy in 1920 and grew up too quickly. From a convenience store, the brothers experimented with a gin and the grinding of cottonseed, flax, and peanuts. In recent years they have been criticized for accelerated diversification into other voices and exploited with short-term bank debt.

To this is added what happened after the PASO of August 2019, when the farmers and intermediaries, who had delivered the goods with a price to be fixed, entered herd to demand that those grains be cleared. It was before the prospect of an increase in withholding taxes. And that claim, almost a bullfight, came at the rate of devaluation in the midst of the escalation of rates and of the banks that turned off the tap and demanded payment of their debts.

One of Vicentín’s most valuable assets is Renova, the world’s most modern and efficient oil factory, which it owns alongside Glencore. It owns the Public Port of Rosario and from Los Corrales de Nicanor is dedicated to the fattening of thousands of cattle.