Vicentin S.A.I.C

vicentin


Country:

Argentina

Sector:

Food Producers

Signing Date:

Oct 2006

March 2010

Nov 2010

Total Project Cost:

USD 108M

USD 60M

USD 60M

Lender of Record:

IFC

FMO

Direct Loan

Cordiant Exposure:

USD 10.7M

USD 10M

USD 10M


Company Description

Vicentin is a family run business that was founded in 1929 as a cotton trader. It started producing edible oils using cotton seed, branched out to sunflower and peanuts, and in the 1970s entered the soy crushing business as the industry was firmly establishing itself in the country. Vicentin is currently one of the largest oilseed processors in Argentina and has continuously modernized and invested in order to keep up with its competitors and remain a state-of-the art player.

Vicentin currently operates three crushing plants which have direct access to Vicentin’s own port on the Parana River. A large majority of Vicentin revenues are accounted by exports. Vicentin’s clients are mainly multi-national trading companies.

Deal Logic

Increasing global hunger for protein and soy meal animal feed continues to provide an anchor for global soy demand. Argentina is well positioned as the lowest cost producer of soy in the world. The borrower, Vicentin, is a fundamentally sound family run company with state-of-the-art soy bean crushing operations which have been established since the 1970’s.

Investment Rationale

  • Strong Fundamentals: Argentina is the lowest cost producer of soy in the world. The industry has grown tremendously over the last 25 years, matching increasing world demand for soy products.

  • Low Commodity Risk: Vicentin has strong risk controls in place which effectively mitigate commodity risk.

  • Solid Borrower: Vicentin has had a strong historical financial track record and also survived the Argentinean crisis with little effect to its overall financial health.

  • Well Structured Transaction: The loan follows best practices in trade finance and uses an off shore structure to effectively mitigate Argentinean sovereign risk.

  • Good Security: The loan benefits from a strong security package.

  • Good Corporate Governance: A testament to the management ability of the company is the fact that the company has prospered and grown over its 75 year history, surviving Argentina’s chaotic financial history and competing with some of the world’s largest multi-nationals.