Grassi SA, one of Argentina’s top grain brokerages, cleared what could be the last hurdle to take over distressed exporter Vicentin SAIC, whose assets include a significant stake in the world’s biggest soybean crushing plant.
Judge Fabián Lorenzini dismissed objections led by a Louis Dreyfus Co venture against the deal that Grassi struck with a majority of creditors holding US$1.3 billion of defaulted debt from Vicentin. If finalised, the restructuring could mark the end of a six-year bankruptcy case that upended Argentina’s multibillion-dollar soy industry.
The deal was made in a “cramdown” phase of the Chapter 11-style bankruptcy protection, where outside bidders could compete – by all accounts the first such bidding process in Argentine corporate history.
Rosario-based brokerage Grassi – led by Chief Executive Officer Mariano Grassi, whose father Hugo helped build the firm and heads the board – has a matter of days to come up with a timeline to execute the restructuring, the judge said in a resolution on Thursday night. It is also taking steps to start re-organising Vicentin, which has managed to stay afloat through the Chapter 11 thanks to tolling arrangements at its plants.
To be sure, Louis Dreyfus and local partner Molinos Agro SA, which competed as a joint venture in the cramdown, still have the right to appeal Judge Lorenzini’s ruling to dismiss their objections, which could extend the legal battle.
Vicentin was run by a family dynasty that faced the might of global commodity trading houses to become Argentina’s top exporter of soy meal and vegetable oil. That all unravelled in 2019 as it left itself exposed to one of the country’s notorious currency runs.
In a statement, Grassi said it would immediately be transferred Vicentin’s shares, adding: “We take on this challenge with deep conviction, great enthusiasm, and complete confidence in our experience, in the capabilities of our people, and in all the valuable human resources that Vicentin still retains today.”
Grassi has held talks to bring in Cargill Inc and Bunge Global SA as partners to help manage international trading operations. Bunge’s role would be focused on the Timbues soy processing plant, the biggest in the world, where it has a 67-percent stake. Vicentin owns the other 33 percent.
“We are already working with our commercial partners to ensure trading channels and financing,” Grassi said in the statement.
by Jonathan Gilbert, Bloomberg
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