It did not take long for Hugo Chavez to start spreading Venezuela’s wealth around after being reelected. Upon his arrival in a “private” trip to Argentina, he announced that development Bank Bandes was ready to lend or capitalize US$ 80 million into milk cooperative Sancor, in a somewhat strange deal. I guess Bandes’ bylaws did not specify that it was meant to develop only Venezuela and it continues helping richer countries develop.
The details are still somewhat sketchy. Sancor was a milk cooperative which has been criticized in Argentina for acting like a coop when it is convenient and like a company most of the time. Sancor has been unable to repay some US$ 150-200 million in debt and a company partially owned by George Soros, Adecoagro, had reached an agreement to obtain control (62.5%) of Sancor by paying US$ 70 million in debt and capitalizing the rest. The rest of the shareholders of Adecoagro are from Argentina. An Argentinean group, the Petersen group, led by Enrique Eskenazi, also made an offer which was rejected by Sancor. Eskenazi, a strong supporter of President Kirchner, owns a number of banks in that country and was reportedly pressuring the Argentinian President to stop the sale to Adecoagro. There have been charges that one of Eskenazi’s banks forced the sale of Sancor by not lending it more money.
What is unclear at this time is if Chavez is siding with Eskenazi or wants to save Sancor by himself. Some people believe that Sancor would have a hard time getting out of its agreement witn Adecoagro. Others think that Chavez is siding with the Argentinean oligarchs in their confrontation with international capital. What makes the story so strange is that Sancor was badly managed by its current administrators and if it could not repay its old loans, it seems difficult that it can repay the loan to Bandes. Curiously, Soros has more affinity politically with Chavez than Eskenazi, other than their support for and friendship with Kirchner.
Newspaper reports from Argentina say that Sancor is asking Chavez for US$ 120 million, which suggests they want to go at it alone. This would make the deal a bad one for Venezuela, as Sancor clearly needs different management if the loan is ever to be repaid.
The Devil's Excrement 
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