Banks allege Argentine crusher Vicentin ‘diverted’ $400m

6 Jul 2020 | Rei Geyssens

Creditors have requested that a New York judge subpoena financial documents from Argentina-based Vicentin, alleging the troubled soybean crusher “improperly siphoned” around $400 million just before its bankruptcy in February.

The banks - including Rabobank, Credit Agricole, ING Bank and the International Finance Corporation - are requesting copies of money wire transfers that they claim were made by the crusher to several close entities during the latter half of 2020.

The companies include the Vicentin Family Group as well as cotton and meat businesses in which the Vicentin family has a stake such as Friar and Nacadie.

“It appears that Vicentin (including its Uruguayan branch) transferred approximately US$400 million on a net basis to or for the benefit of entities controlled by, or connected to, Vicentin Family Group in which Vicentin itself has no material interest,” court documents obtained by Agricensus showed.

“There is no apparent justification for the overwhelming majority of the transfers,” the court documents submitted on June 29 at the Southern District of New York also allege.

The banks added: “there does not appear to be any activity that could legitimately “bridge the gap” between Vicentin’s financial position” by the end of their third quarter on July 31 last year and the collapse of the business in December.

Vicentin – which typically crushes around 22% of the country’s total soybean crush – has grappled with huge financial troubles since December 2019 when it defaulted on paying its oilseed suppliers and brokerage firms while struggling to make debt repayments.

The crusher owes around $350 million to grain suppliers; its overall debt including local and foreign banks is an estimated $1.5 billion.

The company denies the allegations, saying it has always complied with requests for information on its financial position and adding this will not change, a source close to the Vicentin company told Argentine newspaper Infobae Economico on Monday.

“It is impossible to be calm because we are going through a very particular situation, with crazy denunciations against the family, but we are confident that through the bankruptcy and with a working legal system we will find a way out of the crisis,” the source told the newspaper.

The allegations come as Argentine President Alberto Fernandez tries to find ways to take control of the cash-strapped crusher to revive its operations after it halted production at the end last year.

“Crown jewel”

The bank plaintiffs also allege that the money Vicentin received from selling a 16.67% stake in Renova came “mere days” before the crusher stopped its operations and in “an effort to raise cash” has gone missing.

Renova, which the banks dubbed the “crown jewel” of Vicentin’s assets, was a 50-50 joint venture that Vicentin and Switzerland-based international trader Glencore set up in 2006.

It constructed Argentina’s first biodiesel plant, using soybean oil as feedstock, and has expanded ever since.

“Upon information and belief, Vicentin received over US$122 million from the transaction, but it is unclear what became of those sale proceeds,” the documents show.

Vincentin now holds a third of Renova while Glencore owns two-thirds.