Argentina´s Soy King “Los Grobo” continues to expand in Brazil
Grobocopatel had already announced last year their plans to expand strongly in Brazil. “There are more opportunities there as the company is inclined to Argentina and Uruguay … You need to be more balanced with a significant stake in Brazil, ” the Argentine/Ukrainian Gustavo Grobocopatel said in an interview with Dow Jones Newswires.
Their latest business plan is to transfer some assets to a new company and sell shares of the business in an initial public offering in Brazil. The company will be called LG Agronegocios & Participacoes SA, according to a regulatory filing Wednesday.
Los Grobo, which produces soybeans, corn, wheat and sugar in Brazil, Argentina, Uruguay and Paraguay, didn’t provide details on the timing or value of the offering. Grobocopatel is often called the “Soy King” in the press in Argentina by the strategy of his group to lease large areas of land in South American countries to plant soybeans under share cropping.
Los Grobo follows other agricultural companies in Brazil and Argentina seeking to tap stock markets. Adecoagro SA, a farm company with headquarters in Argentina and operations in Brazil, held its IPO in New York in January, and closely held Saladillo, Argentina-based El Tejar, the world’s biggest grains producer, said it may hold an offering as early as 2012.
Worldwide investors are looking at South America for growing more feed grains, corn and soybeans, as rising global meat consumption propels prices. South America accounts for 59 percent of global exports of oilseeds, 11 percent of grains and 37 percent of meat. Farm fields in South America are among the most prized assets in a new global market for agricultural land that has sprung up alongside soaring commodity prices.
South American real estate is rousing considerable interest as a stable and profitable investment option. Property markets, on the whole, are not contaminated with bad debt and distressed assets, as the relatively underdeveloped lending markets insulated the region from the worst of the global credit crunch.
Since potentially higher returns are possible in emerging markets, where entry values are low or agricultural production is currently underperforming. Thus, farm areas in Eastern Europe, Africa and specially South America have become hotspots for farmland investing. These countries stand out as having the best potential for direct investment for those with a three year investment horizon.
Thousands of foreign companies seeking to expand their global footprint, while obtaining needed commodities to sustain growing food demand, recognize the strong potential for growth in the region. Furthermore, many governments, like China, India, Russia and Kuwait, are encouraging movement into South America through the signing of multiple regional Free Trade Agreements. India is currently a member of Mercosur.
The current global setting is simulative for those economies with greater real linkages to the more dynamic emerging economies, and for those likely to be most attractive to foreign investors. Most commodity exporting countries of South America are facing highly favorable conditions—particularly those with stronger fundamentals, who have easiest access to external financing and stand to benefit the most from low global interest rates.
Argentina’s Grobocopatel family and Brazil’s Grupo Vinci Partners, an investment company set up by former Banco Pactual SA partner Gilberto Sayao, are among shareholders in LG Agronegocios.
Credit Suisse Grupo AG, Banco Itau BBA SA, Banco BTG Pactual SA and Banco Bradesco BBI SA will handle the offering.
Gateway to South America, an independent facilitating and advisory company committed to helping investors from around the world, have unique agriculture investing opportunities. The window is fast closing on investment opportunities of a life time. For the simple reason that for the first time in recent history, Argentinian, Brazilian, Chilean and Uruguayan assets in US, UK Pounds and Euro terms offer incredible value. Why else would you see one of the worlds most savy investors, George Soros amongst others investing so heavily in these countries agricultural sectors.
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