Argentine soy giant Vicentin suspends crushing amid debt crisis [View all]

[sandensea]

Argentine soy crushing giant Vicentín has halted most of its operations as the company battles to restructure approximately $1 billion in debt after defaulting earlier this month.

The production issues affect crushing at Vicentín’s processing plants and threaten to ripple through global markets and hit domestic supply of edible oils.

Vicentín, founded in 1929, is Argentina’s top exporter of processed soy and an iconic brand in the South American grains powerhouse. Argentina is the world’s Nº 1 supplier of soymeal livestock feed and soyoil.

The firm, with revenues of $4.2 billion, shipped 929,000 tons of soy oil and 4.4 million tons of soy flour in 2018.

Macrisis

Vicentín's finances were strained by an August 28 decision by the former Mauricio Macri administration, which left office Tuesday, to suspend payments on short-term treasuries.

The measure, part of the "Macrisis" that began with the April 2018 implosion of a carry-trade debt bubble known locally as the "financial bicycle," has impacted businesses, the social security fund, and mutual funds - all of which earned sizable interest income from the defaulted treasuries.

"There has never before been a default on peso-denominated debt," Claudio Belocopitt, CEO of Argentina's largest private hospital chain, Swiss Medical Group, noted at the time.

"Reprofiling is just a word they invented to keep from admitting they stole it all."

At: https://www.reuters.com/article/us-argentina-grains-vicentin/argentine-soy-giant-vicentin-suspends-crushing-amid-debt-crisis-sources-idUSKBN1YH24R

View of Vicentín's soybean crushing complex in Timbúes, north-eastern Argentina - the largest such complex in the world.

The country's top exporter of processed soy, Vicentín is one of a number of Argentine firms impacted by former President Mauricio Macri's August 28 decision to suspend payments on short-term treasuries - a favorite hedge investment by Argentine business and mutual funds alike.

Vicentín's insolvency is one of a number of economic problems inherited by the Alberto Fernández administration. Fernández has pledged to reduce interest rates (the prime rate is currently around 70%), and extend public credit facilities to struggling employers.