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Argentine soy giant Vicentin suspends crushing amid debt crisis - sources

BUENOS AIRES, Dec 13 (Reuters) - Argentine soy crushing giant Vicentin has halted its operations as the company battles to restructure its debts after defaulting earlier this month, two industry sources with direct knowledge of the situation told Reuters.

The production halt affects crushing at Vicentin’s three main plants, which combined have daily soybean crushing capacity of around 40,000 tonnes, and could ripple through global markets and hit domestic supply of edible oils.

Vicentin, 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.

“Vicentin is presently not producing. They are not crushing,” one of the sources close to the company said, adding that there was a blackout of detailed information about the debt restructuring talks.

“Those negotiations are being conducted by very few people at the highest level,” said the source, who asked not to be named due to the sensitivity of the matter.

A Vicentin spokesman did not immediately respond to a request for comment on Friday. The Argentine firm has a joint venture with Glencore Plc called Renova, which has a major crushing plant in Santa Fe province.

Vicentin has not explained how its debt situation got to be so dire. But financing costs are a well-documented problem in Argentina, where the benchmark interest rate is a whopping 63%.

Vicentin has around $350 million in outstanding payments to suppliers, while financing deals with local and international banks add up to well over a billion dollars.

Argentina’s Banco de la Nacion is a major backer, while Dutch development bank FMO, the World Bank’s International Finance Corporation, Rabobank, ING Group and others have lent funds to the firm. The lenders did not comment for this story.

In a statement on Thursday Vicentin said it was drawing up a “viable business and restructuring plan that will require the greatest flexibility and predisposition of all parties.”

The restructuring “will not privilege any creditor to the detriment of others,” the statement said, adding that the company had failed to make debt payments on Dec. 4, without detailing the amount.

“We are a family firm with 90 years of experience that has always distinguished itself by honoring its commitments,” it said. “We have the conviction to continue working on that path.”

Vicentin’s production halt has been bruising for local grains brokers and logistics firms. The company shipped 4.4 million tonnes of soybean meal and 929,000 tonnes of soyoil last year and is a major domestic supplier of cooking oil.

The company’s financial meltdown underscores the challenge facing Argentine President Alberto Fernandez, who took office on Tuesday, as he looks to revive growth, calm rampant inflation and revamp about $100 billion in sovereign debt.

“The new government has not decided to intervene in the Vicentin matter so far,” said another industry source close to the situation who confirmed that Vicentin was not producing.

Reporting by Hugh Bronstein and Maximilian Heath; Editing by Adam Jourdan and Nick Macfie

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