August 3, 2020

Argentinian government aborts plan to buy Vicentin

Argentinian President Alberto Fernandez tweeted that the government has pulled out from purchasing soymeal giant Vicentin after a local judge partly stopped the move, Reuters reported.

In June, Fernandez announced a government takeover of Vicentin after the company declared bankruptcy. Farmers and industry leaders expressed concern over the government getting involved in the private sector.

Fernandez's announcement to cancel the purchase was welcomed by a Vicentin source, who said the purchase should not have been planned. The source was asked not to be named.

As part of the president's original plan, Vicentin managers would have been appointed by the government. However, a judge disallowed the government-appointment managers to act as more than observers, which kept the company's original management team. Fernandez also wanted to seek approval from congress for a full buyout of Vicentin.

Fernandez said on Twitter that the government will not allocate public resources to Vicentin while it still has its current board of directors.

After a credit-fueled expansion last year, Argentinian farmers and banks currently hold more than a billion USD in bad debts.

Industry leaders have welcome the cancelled government purchased of Vicentin. Gustavo Idigoras, head of Argentina's CIARA-CEC export companies' chamber said the solution to save Vicentin should come from the judicial system, as the company was still in a bankruptcy trial.

-      Reuters