Argentinian government is taking over Vicentin?

[gracielle]

https://www.clarin.com/rural/vicentin-enteramos-medios-protegeremos-derechos-_0_b_EAqt8p
June 8, 2020
Vicentín: "We found out through the media and we will protect our rights."

Google Translate

 

[antipodean]

I am not entirely against state owned entities or state participation as I have seen work very successfully in my own country. However in my own country we have zero corruption, full transparency and the state demands those companies run efficiently and turn a profit like any other company. Businessmen, not career politicians, run the companies. The state does not interfere with business decisions and there is the rule of law, including the world's most advanced competition laws which apply to an SoE as much as a private company.
Culturally, politically and systemically, Argentina is a long, long, long way away from this to make that recipe work.

To be fair AR and YPF have not turned Argentina into Venezuela and they continue to function even bringing in USD for the government coffers which is the key point. However, the damage that we have seen and continue to see is to competition, labour, consumer prices and the private sector who must compete with the state with unfair disadvantages and even vindictive behaviour at times driven by cheap politics and expensive corruption. In the case of AR its inefficient and politically tainted operation actually creates a further strain on already limited resources of tax payers, treasury and USD reserves meaning the USD it brings in is always just a short term fix... making it kinda like a crack junkie where the solution is the problem itself so the only thing to do is put the cycle on repeat to survive.

My concern is that this practice now crosses into the food sector which is something you don't f**k around with.
If the private sector gets squeezed out or suffers like airlines or foreign oil companies have, they scale down, close down or are unable or unwilling to come in and invest in something new, the state companies can only do so much as neither time nor money grows on trees = Food shortages.

(I should also add that in my country the state never expropriates companies which is equivalent to a hijacking. If it needs to get involved in a company then it buys in at fair market prices and respects the integrity of private ownership. When time comes for it sell out of companies it follows the same path and sells shares on the stock market in a fair and transparent way rather than some back room deal. Hence the economic system has something called stability.)

 

[gracielle]

....(I should also add that in my country the state never expropriates companies which is equivalent to a hijacking. If it needs to get involved in a company then it buys in at fair market prices and respects the integrity of private ownership. When time comes for it sell out of companies it follows the same path and sells shares on the stock market in a fair and transparent way rather than some back room deal. Hence the economic system has something called stability.)

What may have prompted AF, in the middle of negotiations with the foreign bondholders and during the nationwide quarantine, to take this action?
A vis a vis with CFK re: blocking the intent to purchase Vicentin by "foreign" private investors....

https://www.clarin.com/economia/eco...erno-quieren-empresa-publica_0_BPH6GxYAs.html
June 3 2020
The destiny of one of the main grain processors
José Luis Manzano seeks to buy Vicentín while allies of the Government want it to be a public company

The company left a multimillion-dollar debt unpaid and is in bankruptcy. In addition to Manzano, there are other interested parties such as a former CEO of Dreyfus and the Swiss Glencore. Why can Vicentín be a witness case?

Judge Fabian Lorenzini is in charge of the default of Vicentín, one of the main Argentine companies that declared, before the pandemic, the largest private default since the 2001 crisis with a debt of US $ 1,300 million that many estimate at almost double for supposedly undeclared operations of the firm that was born in the northern province, in the town of Avellaneda.

Very far from Reconquista, in Geneva, several began to imagine how to buy the company that for 90 years has intervened and influences the public life of Santa Fe like few others. In Geneva, where he resides, José Luis Manzano became interested in the subject and there would have connected with the now former Argentine executives who ran the other colossus of the grain and oil trade, Dreyfus. None other than Ciro Echesortu, head of the Ceibos Group fund, who did not reach an agreement with Manzano and are now bidding separately for the company. Of course, Manzano found new allies in a consortium of lawyers from Rosario Casanova, Mattos & Salvatierra and the Carval investment fund, which was an arm of Cargill and is now independent, would have joined. And the other interested is Glencore, the Swiss that flickers among the five largest in the world in the trade.

While several are negotiating how they are going to get paid, such as the ACA cooperative accepting a strong debt reduction, the director of the Banco Nación Claudio Lozano, seeks to transform Vicentín into a non-state public company, an initiative that in this pandemic with the fall of companies, can become a witness case, if such an endeavor is to prosper. Lozano differs from Fernanda Vallejos, the deputy who proposed introducing the state into companies; "What we are looking for is to stop the progress of transnational groups such as Glencore, Dreyfus and Cargill, as well as the appearance on the scene of leaders associated with fateful stages of our country that try to promote an untruthful national and popular solution, it is alarming," he told Clarín.

The cessation of payments by Vicentín caused a kind of inquisition about the family and especially about its CEO, Sergio “el mono” Nardelli, son of a Vicentín and whose profile is described as that of those characters willing to do anything and very aggressive in their trade policy. Those who know them detect fissures between Nardelli and his political uncle and former president of the Rosario Stock Exchange, Alberto Padoan, dedicated to lobbying for the company.

For some experts, the firm started by the Máximo brothers, Pedro and Roberto, who arrived from Italy in 1920, grew too fast in recent years. From a general store, the brothers pioneered a cotton ginning plant and milling, flax and peanut seeds. They also criticize them for diversifying into other areas, such as the film producer that made the film El Padre Jorge about the life of the Pope. Among other objectionable aspects, they affirm that this expansion was leveraged with short - term bank debt.

To this is added what happened after the PASO of August 2019, when the chacareros and brokers, who had delivered merchandise to them under the fixed price modality, flocked to demand that these grains be liquidated. It was at the prospect of a rise in withholdings. Moreover, that claim, almost a run, happened to the rhythm of the devaluation amid the escalation of rates and banks that turned off the tap and demanded payment of their debts. Concurrently there are loans obtained from the official bank that Vicentín assigned to its subsidiaries in Uruguay and Paraguay that are also under investigation.

Vicentín, along with Glencore, owns Renova. It is the most modern and efficient oil factory in the world. And the Frigorifico Friar, Algodon Avellaneda, Arsa, which handles the yogurts and desserts that it bought from Sancor, in addition to the Oleaginosa San Lorenzo. As well as owning the Public Port of Rosario, a container port and Los Corrales de Nicanor, dedicated to fattening thousands of head of cattle. Another of its businesses is a winery in Mendoza that produces exquisite wines and sparkling wines. And it even has a packaging plant at Renopack for the oils produced by Victor Fera, of the Marolio brand. It accounts for companies in Paraguay, Brazil and Spain.

Of course, for the bankruptcy Vicentin hired the Alegría Studio.

 

[on the brink]

Far from making money, AR requires enormous subsidies to keep on flying.

It generated massive losses while administered by La Campora.
"The level of irrationality which has been achieved through economic subsidies can be illustrated by the case of Aerolíneas Argentinas. As of November 2013, this public company received from Treasury $ 3,120 million" That is US DOLLARS.

In 2014, the Buenos Aires to Miami route lost $90 million. That is only ONE flight. You figure.

As for YPF, Argentina has gone from being self-sufficient to importing fuel. Don't have figures for that, perhaps someone else does.

 

[antipodean]

AR generated massive losses while administered by La Campora - it does not make money but requires enormous subsidies to keep on flying.

"The level of irrationality which has been achieved through economic subsidies can be illustrated by the case of Aerolíneas Argentinas. As of November 2013, this public company received from Treasury $ 3,120 million" That is US DOLLARS.

In 2014, the Buenos Aires to Miami route lost $90 million. That is only ONE flight. You figure.

As for YPF, Argentina has gone from being self-sufficient to importing fuel. Don't have figures for that, perhaps someone else does.

That's exactly the problem. They get US$300m in their account but spend US$3bn in keeping it afloat (Obviously some of that is paid locally in freshly minted pesos) and a lot of that is spent paying non-current expenses such as loans etc that need to be serviced in dollars but spread out over time. Meaning the USD it brings in is just to prop up the treasury accounts before using it to pay other debts and expenses of the state that also need USD to service, including whatever gets siphoned off into private accounts abroad or hidden under mattresses here. It is all smoke but it is still USD which is what the government needs since it can't exactly borrow it or bring it in through new investment of an efficient export sector.

 

[on the brink]

It all comes back to that corrosive word, SOBERANIA. Argentina's (nonexistent) international "prestige" demands a flag airline.

Heaven help us....!

 

[Bajo_cero2]

How did the private sector screw this for profit, poorly run company?

They took a huge loan, they fled the money, they declared on bankcrupsy. It was a huge Macrista fraud. The day after they changed the name and continued working like nothing.

 

[Dougie]

They took a huge loan, they fled the money, they declared on bankcrupsy. It was a huge Macrista fraud. The day after they changed the name and continued working like nothing.

If the company took a huge loan and the executives embezzled it, sounds like a criminal investigation should be opened up.

 

[Dougie]

I am not entirely against state owned entities or state participation as I have seen work very successfully in my own country. However in my own country we have zero corruption, full transparency and the state demands those companies run efficiently and turn a profit like any other company. Businessmen, not career politicians, run the companies. The state does not interfere with business decisions and there is the rule of law, including the world's most advanced competition laws which apply to an SoE as much as a private company.
Culturally, politically and systemically, Argentina is a long, long, long way away from this to make that recipe work.

To be fair AR and YPF have not turned Argentina into Venezuela and they continue to function even bringing in USD for the government coffers which is the key point. However, the damage that we have seen and continue to see is to competition, labour, consumer prices and the private sector who must compete with the state with unfair disadvantages and even vindictive behaviour at times driven by cheap politics and expensive corruption. In the case of AR its inefficient and politically tainted operation actually creates a further strain on already limited resources of tax payers, treasury and USD reserves meaning the USD it brings in is always just a short term fix... making it kinda like a crack junkie where the solution is the problem itself so the only thing to do is put the cycle on repeat to survive.

My concern is that this practice now crosses into the food sector which is something you don't f**k around with.
If the private sector gets squeezed out or suffers like airlines or foreign oil companies have, they scale down, close down or are unable or unwilling to come in and invest in something new, the state companies can only do so much as neither time nor money grows on trees = Food shortages.

(I should also add that in my country the state never expropriates companies which is equivalent to a hijacking. If it needs to get involved in a company then it buys in at fair market prices and respects the integrity of private ownership. When time comes for it sell out of companies it follows the same path and sells shares on the stock market in a fair and transparent way rather than some back room deal. Hence the economic system has something called stability.)

Which country are you from? Norway?

 

[zensailor]

In dire situations, they often refer to the Kubler-Ross model....known as the ''five steps of grief''.......they are:
1. denial
2. anger
3. bargaining
4. depression
5. acceptance

In financial situations, there is a 6th step:
6. the vultures swoop in and pick the bones clean

I think that this is what they are trying to avoid, and I wish them the best.