April 29, 2019
Victoria Capital Partners injects US$100 million in Los Grobo to reduce its financial exposition
Today, the board of Grupo Los Grobo announced that its major partner Victoria Capitals injected US$100 million in the company to reduce its financial debt.

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Company’s CEO Jorge Arpi showed some charts explaining that debt will reduce from US$243 million to US$171 million with this injection of money.

Victoria Capital Partners took the control of Grupo Los Grobo Holding in 2016, acquiring 76% of the total stocks, while brothers Matilde and Gustavo Grobopatel own the remaining 24 percent.

Arpi explained that EBITDA to 30 June 2017 rounded US$20.7 million while debt had climbed to US$232 million, i.e. 11times the EBITDA. Last year, EBITDA was increased to US$46.1 million and debt represented 5 times this number.

Now, it is expected that EBITDA climbs to US$75.1 million to 30 June 2019, and as the debt is it reducing to US$171 million, the ratio drops to 2.3.

The CEO talked about the strategic plan for the 2018/2022 period that would conclude with EBITDA reaching US$119 million and debt reduced to US$47 million, or only 40% of the EBITDA.

Grupo Los Grobo was a family owned and operated company in continuous evolution, but in the last ten years, it suffered dramatic changes. They abandoned the Brazil operation selling their linked company Ceagro to Mitsui. Then, in Argentina they sold two of their wheat mills (Bahía Blanca and Rosario del Tala), their pasta factory in Chivilcoy, and their Ag-Tech Frontec.

Currently, the company has four major business units.

1.- Agrofina, an agrochemical factory, placed in Zarate City (Buenos Aires province) which provides the 41% of the EBITDA.
2.- Ag inputs selling, that provides other 21% of the EBITDA.
3.- Cash crops farming, that reaches 180K hectares where Los Grobo shares the 50% and provides 16% of the EBITDA.
4.- Grain commercialization, which originates 1.7 MMT of grain per year and provides the remaining 20% of the EBITDA.

At the command of the company, the management from Victoria Capital Partners it showed decided to re-align the business through four main axes:

1.- Opening new branches in the countryside. They already added four new offices, totalizing 32.
2.- Reforming the Zarate factory, via its technological capabilities, looking for more efficient processes.
3.- Replacing low margin inputs production for high return chemicals.
4.- Increasing the trading operation. Despite its small economic margin, it is considered a non-risk business.

During the morning, the board of Los Grobo was met with officials from local banks and financial institutions, showing the new and discussing the strategic plan. After that, the board run a press conference, with the presence of

They said that they expect to boost the company’s income from US$525 million in 2017 to US$1,011 million in 2022, and growing the EBITDA from 20.7 to 119 million.

“When you think that shareholders will be able to retire dividends?”, eFarmNewsAr inquired. The answer was given by Carlos Garcia, chairman of VCP, present at the meeting. “There two ways in which a shareholder is able to win. One is via dividends, and the other is via a larger value of the company. Well, we can to stay a long time in a company, and we are confident that we will bring results to our shareholders”, García said.

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