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Sociedad Comercial del Plata Jumps on Restructuring Speculation

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Aug. 26 (Bloomberg) -- Sociedad Comercial del Plata SA, an Argentine holding company that defaulted on $350 million of debt in 1999, surged on speculation there will be an agreement over the restructuring of its obligations.

The shares jumped 11 percent to 72 centavos at 2:35 p.m. in New York, and earlier increased to 73 centavos, the highest price in two weeks.

“There’s probably speculation surrounding the repayment of their defaulted debt,” said Juan Jose Vazquez, an equity analyst at Bull Market Brokers SA. “The market cap is very small so it has very big fluctuations easily.”

Shares could plunge after a Sept. 20 vote on a proposal to issue stock equivalent to 80 percent of the company to repay creditors, according to Thomas Mullen, a general partner at TWM Capital LP, who holds about 10 percent of the debt. Bond holders are seeking to obtain 95 percent of the company, he said.

Shares would be diluted as a result of the issuance, said Mullen. “If no agreement is reached, the company will be liquidated, so there is a big incentive to negotiate,” he said.

Shares have increased 22 percent this year.

Press officials at Sociedad Comercial del Plata weren’t immediately available for comment.

To contact the reporter on this story: Camila Russo in Buenos Aires at crusso15@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net

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