Guillermo Rivera Zapata, president of Sintrainagro, Colombia's biggest banana union, believes that in order to prevent the workers from being affected by the choking financial position reached by international distributor Banacol, including its five subsidiaries and agricultural producer Agricola El Retiro, the best thing the company could do was to file for Corporate Reorganization under the Act 1116.
The company's total liabilities, including that of its five subsidiaries and its agricultural producer, amount to 374 650 million pesos, according the Group's data from November 30 (see below table in Spanish).
"Filing for the Act will allow the company and its properties to endure the present difficult situation and work for their economic sustainability, while ensuring job creation and avoiding regional labour and social conflict," argued Rivera, who was informed of Banacol's decision last Tuesday.
The union leader also warned that the largest producers and marketers weren't the only ones experiencing difficult days, as independent producers were about to shut down because they lacked the resources to invest in improving productivity, precisely when international prices were not good (see box).
Next week, Banacol Group will have to deliver its financial statements up to March 6 to the Superintendence of Corporations; the second step of the business reorganization admitted a week ago.
With these most recent accounts, the sponsor designated by the Superintendence will have 60 days to submit the rating and ranking of claims as well as the voting representation (each peso entitles a creditor to one vote). Once the representation is defined then comes the controversy between what the company recognizes it owes and what the creditors demand.
According to experts in this type of process, one of its advantages is that the value of debts up until 7 March are frozen and that the customers can not suspend any trade agreements they had with the company before it filed for corporate reorganization.
However, the company must also honour all of the obligations it acquired after the Superintendence authorized it to be covered by the Act 1116, or else it could risk liquidation.
If the process is on track, the designated sponsor shall submit the reorganization agreement in the first days of October. This agreement will indicate to the creditor the schedule and priority payments that need to be done.
"We welcome this intervention as it gives the company a bit of breathing space so it can continue running and generating employment. We expect this group of farms (Banacol) will comply with what they have to do and we will oversee the process to protect the worker's social and labour rights," Rivera concluded.
Source: El Colombiano