Argentine Postal Service declares bankruptcy
The Argentine Judiciary has declared the privately-run Postal Service to be in bankruptcy and has prohibited its largest shareholder, Italian-American businessman Francisco Macri, and other top officials from leaving the country.
Judge Eduardo Favier Dubois ruled that the entity was bankrupt less than a month after the government cancelled the Postal Service’s concession for non-fulfillment of its contract.
The bankruptcy ruling says that the firm did not come to an agreement with its creditors within the established time period – which expired on Oct. 9 – nor by the extended deadlines requested by the company before a lower court.
Sociedades Macri (SOCMA) controls 69.2% of the Postal Service’s shares. The Service had initiated a process in September 2001 to negotiate with its creditors to restructure its $302 million debt.
The firm blamed its main creditor, the Argentine state, which claims that the Service owes it $167.7 million for unpaid concession rights, for refusing to come to an agreement with it to extract it from its financial difficulties.
Other creditors include Citibank, Banco Rio, the Inter-American Development Bank, Banco Galicia and the International Financial Corporation. Banco Galicia owns 11.77% of the Postal Service.
The Service had proposed to its creditors a reduction of its debt to them by between 60 and 70% and that it make payment to them by issuing 25-year commercial paper carrying 1% annual interest.
After declaring the firm bankrupt, Judge Favier Dubois prohibited Macri and about a dozen top postal officials from leaving the country and ordered them to turn over their assets or report their whereabouts.
The executives must also furnish to Favier Dubois within 24 hours their business books and all other documentation related to the Postal Service’s accounts.
On Nov. 19, the administration annulled the Macri group’s service concession, which had been extended in 1997, for non-compliance.
Since then, the Argentine government has been administering postal deliveries using the same postal workers.
The government has promised that within six months, postal activities will once again be placed in private hands.
