A ruling by a high court has set back a distressed takeover by Bunge Global SA of Vicentin SAIC, once the crown jewel of Argentina’s massive soybean-processing industry.
Five of the six judges in the supreme court of Santa Fe Province — where family-run Vicentin filed for bankruptcy protection nearly five years ago after a US$1.5-billion default — ruled on Tuesday to take on a complaint by a hostile creditor.
The justices will now need more time to analyse the hypothesis of the complaint: that a decision by a lower court to greenlight a Vicentin-brokered deal with a majority of its creditors for a severe restructuring was unconstitutional. That deal included a takeover led by Bunge Global SA and Viterra Inc.
Should the court end up agreeing with the hostile creditors, led by a unit of the Grassi brokerage firm, the bankruptcy protection would likely get pushed wide open into a so-called "cramdown process" where competing proposals could be lodged.
The development is a blow for Bunge, which is completing a global acquisition of Glencore-backed Viterra. Had the judges thrown out the complaint, the rescue plan it negotiated with Vicentin would have been all but sealed, bringing the Byzantine case to a close.
At stake is the ownership of Renova SA, a venture between Viterra and Vicentin that runs the world’s biggest soy-crushing plant.
A spokesman for Vicentin said the court’s decision to take on the complaint would cause unnecessary delays to resolving the company’s future and that a cramdown isn’t a certainty.
The hostile creditor group, which has said it’s planning a bid for the company if the case does go to cramdown, said in a statement that the ruling “is a crucial step to avoid the validation of an illegal arrangement.”
by Jonathan Gilbert, Bloomberg
