Argentina Postal company Correo ignores contract recision
One day after the government stripped Correo Argentino SA of its national postal concession, the company published an advertisement in local newspapers stating its intention to ignore the government’s decision and assuring the public of continued service.
The advertisement said “we do not ratify the decree, but we shareholders and directors of Correo Argentino SA have a firm disposition so that the postal service continues being provided in a regular and efficient form.”
It is not yet known, however, whether Correo Argentino will take legal action against the decree. Correo sources said the company’s lawyers are currently weighing their options and sought to characterize the advertisement as a statement of determination to continue operations as per normal until the situation is clearer. The ad is less of a legal rejection of the decree than a decision to ignore it, they said.
Government officials announced their decision Wednesday, faulting the company for poor service and amassing a debt to the state of ARS450 million ($1=ARS2.875). Correo Argentino says the government owes the company money and has impeded its debt restructuring by refusing to back its request for an extension of bankruptcy protection. The company has ARS900 million in debt and filed for bankruptcy in 2001.
According to the decree, a team of four officials, headed by legislator Eduardo Di Cola, will run Correo Argentino for 180 days, after which the service will be re-privatized. The government said Wednesday the company’s employees will keep their jobs.
Correo Argentino became the world’s first fully privatized postal service when it was awarded its contract in 1997. It is owned by Sideco Americana, a consortium run by Argentine businessman Francisco Macri. Its other shareholders include Banco de Galicia y Buenos Aires SA (GALI.BA), the country’s oldest and largest private bank, and the financing arm of the World Bank, the International Finance Corp.
