Santa Fe province to rescue Argentine crusher Vicentin, no nationalisation

Argentine President Alberto Fernandez agreed this weekend to a new plan to rescue the cash-strapped crusher Vicentin, through which the province of Santa Fe will assume the liabilities of the company so that a wholesale nationalisation by the federal government can be avoided.

After announcing his intentions to nationalise Vincentin two weeks ago, Fernandez backtracked after tensions in Argentina’s grains sector bubbled over, with thousands of Argentinians protesting on Saturday against the federal government’s plans to take the crusher into public hands, among other issues.

“We are working on this together with the president. He agrees to the plan. Under this process the expropriation can be left aside,” Santa Fe governor, Omar Perotti told newspaper La Nacion.

“For us, expropriation is a tool to recover the company, it is not an end in itself. If there is an alternative plan that achieves the same objective, I will gladly listen to it and analyse it,” Fernandez said in a radio interview.

Under the new proposal, control of Vicentin would be achieved through provincial channels, rather than through federal nationalisation, meaning Fernandez would not need approval for the plan from Congress where he does not hold a majority.

The original plans to take Vicentin under public control went down badly in Santa Fe and in other rural provinces, as the traditionally-conservative farming lobby is sceptical about the centre-left government's plans to nationalise the company, and are doubtful that it could be run effectively. 

The alternative plan was designed by the Santa Fe governor, Omar Perotti, after a Sante Fe court ruled against the government’s plans last Friday and ordered the reinstatement of the original management of Vicentin.

The order by the Santa Fe judge Fabian Lorenzini removed government auditors, placed there by Fernandez a fortnight ago, from the company’s management and redeployed them as observers.

Meanwhile the Vicentin family took back control of the bankrupt crusher.

“The continuity of the original administrators would be appropriate, with the same powers that they held at the time prior to the state's intervention,” Lorenzini said.

Vicentin has faced huge financial troubles since December last year, when the crusher defaulted on paying its oilseed suppliers and brokerage firms as the company struggled to make debt repayments.

The crusher currently owes approximately $350 million to grain suppliers, while the firm’s overall debt including local and foreign banks is estimated at $1.5 billion.