A key suitor for the assets of Vicentin SAIC, a distressed trader that was once Argentina’s top exporter of soy meal, wants it to feed pig herds at home rather than only crush beans to ship to livestock in Asia.
Creditors of Vicentin, which entered bankruptcy protection five years ago after a US$1.5-billion default, will soon receive offers from suitors who’ll lay out plans to restructure the debt and rekindle vast export operations.
Bidders include Bunge Global SA, as well as a joint venture between Louis Dreyfus Co and local trader Molinos Agro SA, which is majority-owned by the billionaire Pérez Companc dynasty. They’ll have competition from Grassi SA, a grains brokerage in Argentina’s main export hub that holds Vicentin’s distressed debt. It forced the case into the current legal process known as cramdown and has already rallied the support of some creditors.
Vicentin’s assets include a 33-percent stake in the world’s biggest soy plant, in Rosario, which can process more than 30,000 metric tons of beans a day.
“The first thing is to get Vicentin on its feet again,” Chief Executive Officer Mariano Grassi said on the family-run brokerage’s podcast over the weekend. “In the second stage, which we don’t see as years away but right around the corner, we’ll start adding layers,” he said, citing integrating Vicentin into a domestic pork-farming venture as an example.
Argentina, the world’s number one supplier of soy meal, currently exports nearly all of its production, much of it to feed farm animals in Vietnam and Indonesia.
“If Vicentin forms part of a group with 100,000 sows, it would be a total investment, including the slaughterhouse, of about US$1 billion,” Grassi said. “And our models show Vicentin’s Ebitda could almost double.”
Grassi is in talks to bring Cargill Inc on board as a commercial partner if it wins control of Vicentin. Cargill’s earnings benefited from a joint meat venture, where it feeds crops to chicken.
The Rosario-based company is already involved in a large Argentine pork business. There have been discussions for years in Argentina about trying to add more value to the country’s commodities exports, such as turning feed into animal protein, natural gas into petrochemicals, and lithium into batteries.
Grassi also revealed some of the terms he is preparing to offer to hundreds of crop suppliers who own Vicentin’s defaulted debt. They include smaller losses — or even none at all — for those who trade with Vicentin and help it to recover its standing as a major exporter.
“We’ve been the reason that all this has taken longer than expected,” Grassi said. “But we also hope to be the reason that things turn out well.”
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