Vicentin to sell 90% of shares if creditors agree to 70% debt reduction

December 16, two years and 12 days after the agro-exporter Vicentin declared himself in default of payment, the deadline for reaching an agreement between the company and his 1,727 verified creditors. This is established by the terms of the judicial competition that is treated in the court of the Reconquista, Santa Fe, in charge of Fabián Lorenzini.

In this context, the board of directors of Vicentin presented this Friday a proposal to pay your creditors with a reduction of 70% compared to the calculation of the debt in dollars: would imply US $ 485 million, of the US $ 1,573 claimed initially.

They offer to deliver US $ 20,000 to each of the creditors, in a “prompt payment” Estimated for the middle of next year, taking into account that it would be 6 months after the approval of the eventual deal. They assured that this general expenditure would cover the planned payment for 1,100 agricultural producers, those with debts of less than US $ 4 million. Then, from 2024, the rest would be paid in 13 annuities, to the rest of the creditors.

There were three presentations of the proposal guidelines to different types of creditors

The orientations of the proposal were presented this Friday, in three successive meetings, before the financial creditors, the bailiffs and a dozen of the most representative granary creditors. Everybody They agreed to analyze it and an exchange period was opened of questions.

One of the keys that supports the proposal is that the agreement moves forward to sell 90% of the shares of Vicentin SAIC to a consortium of three agro-exporters: the Association of Argentine Cooperatives (ACA), Molinos Agro SA and Viterra Argentina. Representatives of these three companies attended meetings with creditors as a sign of support.

In exchange for the control of the new Vicentin, the consortium, designated in the negotiations as “Strategic actors, provide working capital of US $ 300 million to ensure the business continuity of the business, from the payment of salaries to the repayment of debts over the next 15 years.

Vicentin directors noted that “the trustworthy support that the operation of Vicentin’s assets entails from the aforementioned strategic stakeholders will ensure a flow to cover the insolvency costs incurred.”

They offer to pay in dollars, although part of the debt has been verified in pesos

Another important fact is that the payments are made in dollar value – according to the official quotation – despite the fact that the judge of the court competition, Fabián Lorenzini, verified a good part of the debts in pesos values, in general those of the producers who delivered grain.

For this reason, Omar Scarel and Estanislao Bougain, two of the directors of the agro-exporter, argue that “In relative terms, this proposal assumes the payment of almost 50% of the verified debt in pesos, which was the currency in which the credits were verified.” Also considering that the law establishes payment in pesos, they point out that when the credits of all agricultural producers are dollarized, they are placed on an equal footing with financial creditors.

A group of international banks led by the International Finance Corporation (IFC), among other entities that are referenced as major private creditors, claim a debt of US $ 530 million. In addition, Banco Nación owes US $ 300 million.

So far, none of this has been presented in the court file, because now the bottom line is that the creditors accept this proposal which Vicentin’s board of directors has called “guidelines”, although ruled out the possibility of improving the offer. “We give what we have. We arrived at these figures based on the actual flow of assets of the company, which we estimate after proper restructuring it could pay debts of around US $ 33 million per year, ”Bougain said.

They see it as a “less bad” alternative to bankruptcy for creditors

From Vicentin they consider it the “less bad” alternative. They argue that “this proposal is perennial of an operational business, with its assets intact, with wages, social charges and taxes per day, which avoids a bankruptcy scenario that would not favor any of the actors involved in this instance and that – in addition – this would endanger the sources of work which until now have been entirely preserved ”.

For an agreement to be validated within the framework of the competition it is necessary to obtain the support of 51% of creditors (which makes essential the support of producers, who represent the majority in this regard) and 66% of verified debt (where banks prune). Therefore, neither group can approve the proposal.

The stake for Vicentin and his “strategic players” is to convince the creditors that before reaching a general destruction of value, it is preferable to revitalize the operations of the “new Vicentin”, in the hands of a consortium of three agro-exporters and with the historic owners moved from the pipeline. They have a little over two months to achieve this.

In this context, Vicentin’s board of directors has already started talks to gain buy-in from creditors, financiers and granaries.