July 31, 2020 / 11:34 PM / 14 days ago

Argentina ditches takeover plan for soymeal giant Vicentin

BUENOS AIRES (Reuters) - Argentine President Alberto Fernandez pulled the plug on a planned government takeover of cash-strapped soymeal giant Vicentin, according to a tweet sent by the Peronist leader on Friday, after a local judge partially blocked the move.

FILE PHOTO: Soybeans are loaded onto a truck at a field in the city of Chacabuco April 24, 2013. REUTERS/Enrique Marcarian/File Photo

In early June Fernandez said his government would “rescue” Vicentin, once Argentina’s top soymeal exporter, after the family-owned company went broke last year. The move was criticized by farmers and industry leaders who characterized it as meddling in the private sector.

Past Peronist governments, including the one led by Argentina’s current Vice President Cristina Fernandez, had vastly increased the government’s role in the economy.

“We have repealed the decree that ordered the intervention of Vicentin,” Fernandez wrote on Twitter.

A source at Vicentin said the company welcomed the announcement. “The intervention never should have happened in the first place,” said the source, who asked not to be named.

Fernandez originally planned for the government to appoint managers to Vicentin. But a judge later stopped the government-appointed managers from acting as more than observers, a ruling that left Vicentin’s original management team in place.

“The national government will not commit public resources while the current board of directors remains in the company, nor will it form a trust sharing its management,” Fernandez wrote on Twitter.

Argentina is the top international supplier of soymeal livestock feed used to fatten hogs, poultry and cattle from Europe to Southeast Asia. It is a relatively healthy part of an economy mired in recession while battling COVID-19.

Fernandez’s intervention plan involved seeking congressional approval for a full takeover of the company. Vicentin went broke after going on a credit-fueled expansion in 2019, leaving farmers and banks holding more than a billion dollars in bad debts.

“Our intention has always been to rescue the company, preserve its assets, collaborate with the affected producers and maintain the employment of its workers,” Fernandez said.

Industry leaders applauded the canceling of the government’s intervention.

“This was the right decision,” said Gustavo Idigoras, head of Argentina’s CIARA-CEC export companies’ chamber.

“The solution to Vicentin should come from the court system,” he added, noting the company was in bankruptcy proceedings.

Reporting by Hugh Bronstein and Maximilian Heath; Editing by Leslie Adler, Daniel Wallis and Tom Brown

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