02/15/2020 - 6:36
Although still in intensive care and with a reserved prognosis , the Vicentin Group, the largest agro-exporter of cereals and oilseeds in Argentine capitals , which on December 4 declared itself in cessation of payments, with an estimated debt of US $ 1,350 million , fights in a frantic race to avoid bankruptcy and the dismantling of an organization of 2,200 employees with high gravitation throughout Argentina's agribusiness .
Last Monday, Vicentín presented himself to bankruptcy proceedings , with the objective that the judicial intervention “protect the assets, match the creditors” -to avoid having priority those who are already litigating with precautionary measures that intervened the case- and expedite agreements to manage a way out of the crisis.
"Let's see if it is possible, we know it will be very difficult but we are trying with more than 100 aligned shareholders," official sources at the company told Clarín .
The strategy they propose, with an uncertain prognosis for now - as the protagonists themselves recognize - is to return to full operation as soon as possible , considering that the company's strength is in the flow of its businesses, which far exceed the volume of debt . In fact, in the last year, the turnover exceeded US $ 4,255 million, leaving at a level of 7% the credits with the National Bank, the main creditor among private banks.
Evolution of financing and sales
Relationship between the Nation Bank line and annual billing
Source: VICENTÍN Infographic: INDEC
The debt with the Nation has to do with a credit line that evolved in relation to the operational growth of the company and significant investments (see attached chart). But in the context of the devaluation of the peso of the last two years, the operation that in the case of Vicentín is 90% in dollars, led to the line to pre-finance exports - agreed with the bank the US currency - exceeded the 15% limit of the loadable capacity of the Nation.
Yesterday that resulted in another judicial collapse: the federal prosecutor Gerardo Pollicita accused and requested to open an investigation to the former head of the Bank of the Nation Argentina, Javier González Fraga and to those who were syndicated as responsible for the Vicentin firm, Alberto Padoan and Gustavo Nardelli , in a complaint for alleged irregularities in the granting of loans to the company.
The Bank of the Province of Buenos Aires owes another US $ 26 million, to the City of Buenos Aires and BICE, US $ 5 million to each. Another US $ 650 million of liabilities is distributed among international banks and credit agencies.
And the rest of the debt, for about US $ 350 million, is with commercial clients who were given priority since Vicentín managed to put together a strategy to get out of the crisis, one month after the cessation of payments .
The plan that Vicentín executives outline with expectation - although they assume that the prestige of 90 years vanished in one day and must be rebuilt - is based on three extrajudicial preventive agreements (APEs), one with commercial clients, the first to be launched, (see box, below) and two others with the banks: the one related to Argentine public entities is also moving forward: they asked for deadlines and offered additional guarantees , which in the case of the National Bank would be dealt with in the directory. Beyond that they see logical that the new authorities of the Nation review the acted in the previous government, in Vicentín they believe what they transmitted to them: “The intention is to collect the credit and there is no plan to nationalize”, they trust.
The other axis to recover is the availability to sell physical assets of the company. Although the directors of Vicentín clarify that this will depend on the timming of the general situation, because today the plants are worth less and less in dollars.
They say there were some surveys with potential buyers or new national partners but for now they did not prosper . The sale of 16, 7% of Renova to its partner Glencore, allowed to settle part of the most urgent debt and to have funds to continue paying the salaries.
If they manage to get out of the throbbing of what they define as a perfect storm - devaluation and high liquidation of grains in the second half of 2019 - and although they do the self-criticism of having exceeded in financial leverage, they expect to work with Pharaoh - for third parties - even from the 33% they maintain in Renova, within 90 days . To "live again," they need to go back to work.
Proposal for payment to 1,863 commercial creditors
In the strategy that Vicentín, the producers and intermediaries who had given them grains have a leading role , because they are considered “the sap that gave life to the company” and the key to recovering operational vitality as soon as possible.
In that sense, one of the first measures that Vicentín took in the middle of the cimbronazo was to propose an Extrajudical Preventive Agreement (APE) to 1,863 creditors , to which he offered the following conditions:
- Dollarization of the debt as of December 4, even that pesified and unpaid.
- Payment of 20% of the credit 10 days after the judicial approval, with a minimum of US $ 30,000 per CUIT or the total amount of the credit if less. 1100 creditors would cancel everything and 368 would receive a payment equal to or greater than 50%.
- The payment of the remaining 80% would be made in 8 years , although it could be accelerated through a collection of up to 16.67% of the debt on an annual basis, provided that the creditor delivers sufficient raw material , according to the following scale: 7 US $ per ton of soybeans delivered in April, May and June; US $ 10 per ton of soybeans delivered from July onwards, until March of the following year; US $ 10 per ton of sunflower; and 4US $ per ton of corn and wheat.
- It also added to contemplate the situation of the brokers with commission credit : they will be paid 1% of the prize for the producer per ton sold.
The offer has already been launched to the market and in Vicentín they hope that in 30 days it could be closed and ready for approval .