Two subsidiaries of Argentina’s utility Grupo Albanesi have reached out to creditors after missing a payment on dollar bonds it issued just six months ago.
Generación Mediterranea SA and Central Térmica Roca SA are approaching bondholders to resolve a dispute over US$19 million in interest that came due on May 5, the companies said in a regulatory filing on Tuesday. Debt holders have yet to organise a formal creditors committee, according to people familiar with the matter, who asked not to be named because the discussions are private.
Investors have ditched the bonds since the companies disclosed they would miss the payment at the end of April. The US$350-million notes due 2031 – jointly issued by the two subsidiaries in October – have tumbled some 28 cents to trade at 60 cents on the dollar, according to Trace data. The rout has turned the notes into one of the worst performers among Argentine peers this year, according to data compiled by Bloomberg.
Company officials have a 30-day grace period to settle the outstanding dues or risk entering into default. If talks fail, Albanesi could join a swath of firms that have struggled under President Javier Milei’s austerity campaign that has included cuts to subsidies and a lifting of currency controls.
“We cannot say that we are surprised,” said Diego Méndez, a strategist for Buenos Aires-based brokerage PPI in a note on Monday. “For a few years, we have signalled that its solvency was at least questionable, given that it showed by far the worst credit ratios in the industry, and even compared to other sectors.”
The subsidiaries have tapped Finanzas & Gestión SA and Rothschild & Co as financial advisers, as well as Skadden, Arps, Slate, Meagher & Flom LLP as legal counsel abroad, according to the Tuesday regulatory filing. A spokesperson for Albanesi declined to comment beyond the document.
The missed payment comes after the electricity generator invested heavily in two of its thermal power plants and started building a new one, crimping its balance sheet. Albanesi, the parent company, booked a pre-tax loss of US$190 million in 2024, compared with a pre-tax loss of US$35 million the year before. Its ratio of net debt to earnings before interest, tax, depreciation and amortisation stood at more than 8.5 times at the end of 2024, up from 8.1 in 2023 and 4.57 in 2022, according to filings.
Adding to the woes was a dispute between Milei and Argentine power companies earlier this year after the administration stopped paying them as part of a push to reverse the country’s budget deficit.
Economy Minister Luis Caputo offered only half of the money the generators were owed for certain dispatches to state electricity wholesaler Cammesa. The companies, among them Pampa Energia SA and Central Puerto SA, reluctantly accepted, but Albanesi was already mired in a liquidity crunch. Cash and cash equivalents fell to some US$2.46 million in 2024 from US$42 million the year before.
Still, the decision to renege on its obligations came as a surprise to some analysts given that executives had made strides to strengthen its balance sheet. Albanesi tapped bankers in October to refinance some debt and issued new senior secured notes which it now has failed to pay interest on.
“Albanesi has been walking a fine line for quite some time, but the update was a bit unexpected considering that the successful debt exchange conducted last October seemed to give the company some breathing room,” said Ezequiel Fernández, head of credit and equity research at Balanz Capital.
Fitch analysts in October wrote that Ebitda was expected to rise to US$270 million in 2025, compared with the US$182 million the company reported for 2024. Albanesi also sold local bonds and took out a US$59-million syndicated loan in January to cancel bank lines and rolling debt.
Those factors “had made us comfortable that, though tricky, this would be a year of improvement for the company,” said Alejandra Andrade, a Latin America Corporate Research Analyst at JPMorgan Chase & Co, who maintains a neutral rating on Albanesi’s notes.
For now, strategists remain on watch for how the company will emerge from the debacle. Albanesi’s bonds have pared back some of their losses in the days following the missed interest payment, a possible sign that the power generator may have an easier time dealing with creditors.
“This seems to reflect that at least a part of the market could be considering a less adversarial, out-of-court agreement with creditors as the more likely scenario,” Balanz’s Fernández said.
by Kevin Simauchi & Ignacio Olivera Doll, Bloomberg
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