Top food firm Molino Cañuelas files for bankruptcy

Molino Cañuelas, one of Argentina's leading food producers, has filed for the local equivalent of Chapter 11 after years of disputes with creditors.

Molca, as the company is known in Argentina, could not reach an agreement with creditor financial institutions, so it was forced to request the opening of bankruptcy proceedings, the firm reported in a statement sent by email via an outsourced public relations firm.

The company owes US$1.4 billion to domestic and foreign debtors, including ING Groep NV and Rabobank UA, a spokeswoman confirmed.

Molca sought a consensual settlement out of court, and at one point the president, Aldo Navilli, even put up a regional golf course as collateral.

Molca, which employs 3,000 workers in 15 plants and is one of the main flour exporters in the region, is now trying to use the procedure to protect its assets, and intends to maintain normal operations while the process develops.

In the statement, the company attributes its situation to years of economic problems in Argentina, including the devaluation of the currency that also caused the collapse of the giant soy exporter Vicentin SAIC.

The company said the move would allow it to enter a "preventative insolvency proceedings" as it seeks to "protect its assets and jobs." 

Vicentin's own bankruptcy process continues after a default in December 2019, with the family property poised to hand over a majority stake to a consortium led by Glencore's Viterra Inc, if creditors agree.

– TIMES/BLOOMBERG [reporting by Jonathan Gilbert]