Protests in Argentina over government plans to nationalize soy processor
People took to the streets at the weekend to protest over the plans to nationalize the company, according to an article on Bloomberg.
Vicentin owes creditors more than $1bn. The government said the expropriation move is about saving jobs and ensuring the future of the country's food sovereignty.
Opponents say any kind of nationalization will only exacerbate the country's economic crisis.
But the country’s president, Alberto Fernandez, remains determined to nationalize the company, and this, despite the move by the judge overseeing Vicentin’s bankruptcy to reinstate executives at the leading soy processor on Friday [June 19].
The judge also said the government officials who seized control of the company by decree should step aside to perform a supervisory role.
In February this year, Vicentin filed for bankruptcy protection. In December 2019, it released a statement that it was experiencing financial difficulty and that it was initiating a process to restructure payments owed to creditors.
“In addition to lending institutions, farmers and grain brokers also face debt exposure from Vicentin thus highlighting the difficulties for Argentinian businesses in a country where interest rates have exceeded 65% in recent months,” noted the USDA back then.
Vicentin’s difficulties were exasperated by the fact that farmers had looked to sell crops earlier to processors, in a bid to avoid paying the higher export taxes anticipated under the new Argentinian government.
By the first week of December 2019, the USDA noted that Argentina’s farmers had sold not only wheat but also corn and soybeans in volume that exceeded 19 million tons more compared to the same week in the year prior.
Indeed, we reported how Vicentin was forced to sell part of its stake in a joint venture with Glencore Agriculture in December 2019.
Glencore bought up a further 16.67% of Renova from Vicentin, to become the majority owner with a 66.67% stake, with Glencore Agriculture lead, David Mattiske, saying the company was very confident about the future of the agriculture industry in Argentina.