The board of Vicentin, which is a near 90-year-old business, made the announcement yesterday [February 10] through an external public relations representative.
On December 4 last year, Vicentin, released a statement that it was experiencing financial difficulty and that it was initiating a process to restructure payments owed to creditors. A USDA report from December said the trader had halted crushing operations at some facilities and was in negotiation to sell other plants, and also get government assistance.
“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, according to Reuters.
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.
Selling off JV stake
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.
Renova has several assets in Argentina, including a soy processing facility in Timbues, which was constructed in 2012 and expanded in 2019.
When asked about Vicentin’s challenges back in December, Glencore declined to comment.