Algodonera Avellaneda enters salvage process to avoid bankruptcy

A judge in Santa Fe, Argentina, has initiated a 'cramdown' or salvage process for Algodonera Avellaneda S.A. to prevent the bankruptcy of the Vicentin family-owned agro-industrial firm. Judge Fabián Lorenzini issued the ruling after the company failed to secure the necessary creditor majorities to approve its debt restructuring proposal. The company currently faces a significantly negative net worth and substantial debt, primarily owed to the Banco de la Nación Argentina.

The company operates at approximately 60% capacity and employs several hundred workers. To manage payroll, the main plant in Reconquista utilizes a 'fasón' contract model. While some reports indicate around 200 workers are currently maintaining positions through this method, others note a total workforce of nearly 400. The salvage period allows third-party bidders to register interest in acquiring the firm to restructure its debts and preserve operations. If no satisfactory proposal is reached, the company faces liquidation.