Politicians in Uruguay have agreed an emergency loan to save Caputto, the country’s biggest citrus exporter, from bankruptcy so that it can harvest the new season crop.
The Salteña-based company had been unable to start harvesting due to a lack of working capital, putting its entire 2019 crop under threat.
The fund of 115m pesos (US$3.4m) was unanimously agreed at an extraordinary session by the House of Representatives on Friday and will pass on to the Senate on 2 April.
Ernesto Murro, Minister of Labour and Social Security, said the loan was repayable within a maximum period of 12 months and was to cover the direct and indirect costs related to the forthcoming harvest, including the company’s wage bill, but did not include previously unpaid wages.
According to sources close to the company, Caputto needed an injection of at least US$2m to start the harvest and a further US$2m to cover its wage bill and operating costs. The company faces a liability of US$64m and has assets of US$79m.
Caputto has been in difficulties for a number of years but its situation was exacerbated by last year’s poor exports, which at US$62.4m recorded their worst performance since 2007.
Murro stressed that the government’s aim was to protect jobs in the sector rather than to rescue the company, which legislators accused of mismanagement.
“We are trying very hard to ensure that Caputto does not get a single one of these 115m pesos,” he said. “I want to be very clear, this support is not for Caputto, but for the harvest.”
Murro added that the company had already received help from the state, and owed money to other state agencies, as well a US$20m debt to Banco República.
“Uruguay exports to the best markets in the world, including the US and Europe, and there are important national and international companies who are working very well in the country, including Guarino, Camposol and San Miguel,” he said.
“The citrus sector in Uruguay is fine; what is wrong is Caputto.”
Manuela Mutti from the country’s MPP party agreed that Caputto’s woes were due to poor management rather than the poor health of the industry.
“The citrus sector is not in crisis thanks to actions taken by the government…such as varietal renovation, which allowed us to open up the US and European market,” she said.