April 9, 2020

Glencore Agriculture offers US$325 million for stake in Argentine soy crushing plant Renova

The commodities trader is looking to purchase the remaining minority stake in the soy crusher held currently by Vicentin, a bankrupt family-owned company, sources told Reuters.

Glencore Agriculture, which is based on Rotterdam, Netherlands, is set to renew its initial offer made in March, but COVID-19 may affect the deal.

Both Glencore and Vicentin have declined to comment.

Renova is one of the world's top soy crushing facilities, with a 20,000 tonnes daily crushing capacity.

Soy is one of Argentina's key export dollars, but the industry is badly affected by the COVID-19 pandemic as the government negotiates with municipal authorities to allow free movement of transport through their municipal jurisdictions during imposed movement lockdowns.

Glencore currently owns 66.7% of Renova, with the remaining held by Vicentin.

Sources reporting to Reuters said Vicentin stopped crushing soy after defaulting on debt but Glencore continues to pay workers at Renova eyeing a possible takeover of the company.

Vicentin became bankrupt after undergoing an expansion fueled by credit. Political issues in Argentina related to the election in 2019 led to a crash in the market, with international banks pulling out of the country. This resulted in added pressure onto Vicentin.

Vicentin currently has commercial debt of US$300 million and has loans from local and international banks amounting to US$1 billion. The company will speak to banks after completing restructuring talks with farmers.

-      Reuters