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$135 million credit line to Argentina's Dairy Co-operative

14 December 2006

ARGENTINA - Hugo Chávez' Government increased an initial offer to rescue Argentine dairy cooperative Sancor from USD 80 million to USD 135 million, Reuters reported.

The loan agreement Argentine and Venezuelan officials executed on Tuesday provides for the Venezuelan state-run bank Bandes to grant USD 80 million for refinancing of Sancor debt, while the remaining USD 50 million will be Venezuela's contribution as working capital.

Sancor is to repay this debt by exporting powdered milk to Venezuela during 15 years, at an estimated 20,000 tons per year, together with a plan for technological transfer and personnel training.

The Venezuelan Government move drew the attention from world markets and was highlighted in a number of foreign media. For instance, BBC's headline on the issue was: "Chávez' loan to Argentine dairy firm."

The Argentine newspapers also reported on the deal, and claimed that following Venezuela's loan Sancor avoided purchase by Adecoagro, owned by billionaire George Soros

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Source: el universal.com



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