No investor, creditor or worker representative filed to take part in the rescue process for Argentina’s Algodonera Avellaneda textile company. A court must now decide whether to declare it bankrupt.
The registration period for potential buyers expired at 12:30 p.m. on Oct. 5. It had opened on Sept. 29 under an order by Judge Fabián Lorenzini. A court clerk checked the SISFE electronic filing system and recorded on Oct. 5 that no bids, offers or applications from potential participants had been received.
The so-called cramdown process was opened after Algodonera Avellaneda failed to secure the creditor majority needed for a restructuring agreement. Creditors, a workers’ cooperative and outside investors could register. Applicants had to show experience in the textile sector, active sales channels and a compliant tax record for the previous five years. The company itself could also enter the process without registering in advance.
Banco Nación accounts for more than 80% of the company’s eligible unsecured liabilities. The bank’s admitted claim is 1.5857 billion Argentine pesos and $260.79 million. Algodonera Avellaneda had asked the court to exclude the lender from the creditor vote, calling it a “hostile creditor.” The court rejected the request.
The bank argued that the company’s proposed repayment plan would not return all of the funds it had disbursed. Judge Lorenzini said the bank had acted to protect its own interests. Bankruptcy has not yet been formally declared. Several procedural issues remain before the judge makes a final decision.
The company has about 360 employees. When he opened the rescue process, Lorenzini said the spinning plant was operating at 60% capacity because of equipment problems. The factory continued working under toll-processing contracts, with the proceeds used to pay wages rather than the company’s admitted debts.