A Financial Strategy Navigating Troubled Markets
July 9, 2025, El Cronista Comercial
The citrus company had to cancel a market offering due to weak demand conditions. But the shareholders opted to loan money to the company to cover payments on time. The plan.
“The truth is, in many cases in the market, shareholders, seeing prices at 70 or 60, a finance person would have said: ‘Restructure, you’ll cut your debt by 40%;’ or at these prices, it’s better to buy back debt. But that’s not what the shareholders decided. They know the business plan, the company’s strong performance, and they decided to loan money to the company, and it was the right move. Our situation is not like others in the market.”
These are the words of Pablo Ferrari, CFO of San Miguel, the world’s leading industrial lemon processor, which, according to the company, got caught up in the tough financial environment that affected several Argentine companies in June.
Despite being agro-industrial in nature, its operations are quite different from those of input suppliers, who were hit by cost mismatches and a weak dollar, leading many into default.
In this context, Ferrari and CEO Manuel Suárez Altuna explain that they had commitments tied to the International Finance Corporation and other financial institutions, requiring them to make all efforts to go to market before advancing contractual steps.
“We’re seeing a lot of interest from international investors due to what’s happening in Argentina. That, combined with our business model performing as expected, makes us see a great opportunity,” says Suárez Altuna.
However, as market interest rates—flooded by big 2024 bond issues aiming to capture funds from capital repatriation—rose beyond 9.5% APR, San Miguel didn’t receive the offers it had anticipated. The company canceled the issuance and was left temporarily unable to meet a $53 million debt maturity at the end of June. The gap was filled by a six-month, capitalizable loan of $15 million from shareholders, and the payment was made on June 26.
Strategy
The company—owned by Martín Otero Monsegur, Gonzalo Tanoira, Luis Roque Otero Monsegur, Alejandro de Anchorena Jr., Cristián López Saubidet, and Agustín Otero Monsegur—operates in Argentina (60% of revenue), Uruguay, and South Africa (20% each), and has shifted its business plan from fresh lemons to industrial processing.
They produce lemon juice, oils, and essences and are global leaders.
“The shareholders know exactly what future revenues will look like,” explains Ferrari. “Unlike other sectors, the macroeconomic changes didn’t affect our business, and most of our growth is outside Argentina,” he adds, keen to differentiate San Miguel’s situation from others in the market.
In recent years, they’ve financed growth through shareholder contributions and periodic market issuances of hard-dollar bonds with 24-month terms and a stable 9.5% APR. Now, they’re preparing a new financial program—details undisclosed—that will enable structured funding from foreign investors.
“To support our projects, ease financial strategy, and strengthen capitalization, San Miguel’s board had already approved a follow-on (stock issuance), and they now trust in the potential of a new structured financing round. This semester will be critical to achieving both goals.”
The strategy likely aims to reduce working capital costs to levels comparable with export prefinancing and shift away from using bonds to finance long-term debt or investment.
“But well, that’s what was available in Argentina before,” they say with resignation, as they await a new wave of market-driven investment.
