FERRERE advised the Inter-American Investment Corporation, an agency of the Inter-American Development Bank, on financing of the Argentinian company ERCSA.
Financing was provided through a credit line facility to be used for permanent working capital to support the company’s sales growth.
ERCSA is an Argentinian company established in 2008 by a group of Argentine and Uruguayan entrepreneurs which mills soybeans for production of balanced feed and other soybean meal and oil products. The production facility is located in the Gualeguaychú Industrial Park in Entre Ríos, Argentina.
This transaction is framed under the regulations of Argentina’s Central Bank for pre-financing of exports by companies producing in Argentina. To satisfy these regulations, the funds received by ERCSA can only be used for pre-financing of its exports and ERCSA had to set up a special collection bank account in Uruguay in order to receive payments in US dollars deriving from its export transactions. The funds in the collection account are used for repayment of the loan to the IIC. Use of such at his foreign collection account is expressly permitted under Argentinian Central Bank regulations, and provides relief from the stringent exchange control measures adopted in the recent past by the Argentinian Government.
As collateral for repayment of the loan, ERCSA’s Uruguayan subsidiary was designated as joint and several guarantors in the Credit Line Agreement and created a Guaranty Trust. The assets contributed to the trust were Chilean treasury bonds for a total nominal value of USD 2,250,000. FERRERE - through its company EF Asset Management Administradora de Fondos de Inversión S.A. – will act as trustee.