Distressed fertilizers producer Monómeros Colombo-Venezolanos, the Colombian subsidiary of Venezuelan state-owned Pequiven, has filed for bankruptcy protection on the heels of a regulatory intervention.
Colombian corporate regulator SuperSociedades is expected to accept the company into the reorganization process that would lead to an “expedited rescue plan”. The strategic company supplies about 40pc of the Colombian market.
Under Colombia’s emergency decree 560 of 2020, Monómeros would have three months to come up with a plan to allow it to continue operating and meet obligations with creditors and suppliers.
“The administration of Monómeros Colombo-Venezolanos has decided to use the transitory measures of decree 560 of 2020 to design along with suppliers, workers and creditors a rescue plan that will ensure the continued operation of the company, preserving jobs in Barranquilla and Buenaventura and protecting food security in Colombia,” the company said.
Last year Colombia streamlined bankruptcy proceedings to cope with the economic blow of the Covid-19 pandemic.
Barranquilla-based Monómeros has come under severe financial strain, mainly because of a lack of access to credit from Colombian and foreign banks wary of breaching US sanctions on Venezuela, despite a license from the US Treasury’s Office of Foreign Assets Control (Ofac) that administers the sanctions.
The bankruptcy protection is considered essential to keeping operations afloat, beyond the recent intervention that sparked upheaval among the company’s Venezuelan managers. “Unlike emergency decree 560, the control (of the company) can only aggravate the financial situation,” Monómeros said, noting that several suppliers suspended commercial relations with the company after the regulatory intervention.
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