SAO PAULO, April 24 (Reuters) - A previously unreported Brazilian court injunction last month has thrown a wrench into Bunge Ltd’s plan to take over two soy processing plants from local crusher Imcopa, according to court filings seen by Reuters.
The injunction was granted on behalf of two Panamanian entities identified in the filings as “third parties.” It effectively suspended a bankruptcy court auction in which Bunge had bid a combined 50 million reais ($9.16 million) for the plants.
The Feb. 17 offer, made under an Imcopa reorganization plan approved by creditors in 2017, also entailed assumption by Bunge of around 1 billion reais ($183.11 million) of debt related to the assets.
Both Imcopa and Bunge have since challenged the ruling suspending the sale of the plants, which crushed a combined 1 million tonnes of soybeans in 2019, according to filings dated April 20 and April 16.
Imcopa argued before the court that the Panamanian entities, which say they acquired claims against Imcopa from other company creditors, made “false allegations” and hence “induced the judge to error.”
Procedural delays caused by the coronavirus pandemic have made it difficult to predict the timing of a new ruling that would allow Bunge to close the deal, a source familiar with the matter said on condition of anonymity.
Bunge’s acquisition is seen as crucial to keeping the plants running, protecting 650 jobs and repaying Imcopa creditors.
The Imcopa plants have been run since 2014 under an agreement with Brazilian brewer Cervejaria Petrópolis whereby it pays certain operating expenses in exchange for the proceeds of their soy processing activities.
That contract represents Imcopa’s only source of income, it said in court filings.
Last year, Imcopa tried to end the agreement with the brewer due to an alleged breach of contract, sparking a parallel legal battle.
Imcopa is now seeking repayment of at least 4 million reais from Cervejaria Petrópolis covering certain operating expenses incurred this year, court filings showed. Imcopa says its ability to keep processing soy is threatened by a lack of money to pay suppliers.
Bunge said it won the auction but has yet to sign the purchase agreement for the plants, which will only happen after the bankruptcy court approves the deal.
Imcopa declined to comment.
Cervejaria Petrópolis told Reuters it is current on all its contract obligations, adding that it does not recognize certain expenses claimed by Imcopa under their agreement that extends at least until 2024.
$1 = 5.4613 reais Reporting by Ana Mano Editing by Paul Simao