Former Truck Driver Turned Argentine Sugar King Is Selling BondsBy
After two acquisitions, Luque’s company is seeking capital
Supermarket, wholesaler is reorganizing ahead of any offerings
Argentine businessman Emilio Luque, whose conglomerate has become the country’s biggest sugar producer, is trying to figure out how to finance his business as it grows.
In an interview, the former truck driver said his Emilio Luque Supermercados y Mayoristas chain is considering selling bonds for the first time next year and perhaps going public in 2019. The supermarket and food wholesaling company is looking to raise at least $80 million to finance capital expenditures over the next two years.
The company agreed to buy two sugar mills over the last year, increasing its share of the domestic market to about 20 percent. The second deal was a surprise to even Luque, he said.
"I didn’t want to buy it," he said in Bariloche, Argentina, on Sept. 17. But he said he was persuaded after officials from the Argentine unit of Embotelladora Andina S.A. visited him twice to urge him to go through with the deal. The Coca-Cola bottler offered to finance half of the acquisition by agreeing to a long-term sugar purchase contract, he said.
Terms of the purchase were not disclosed, although local press pegged the price at about $150 million, a figure that Luque said was in the right ballpark.
Talking to Advisers
Luque’s company contributed about 44 percent of the purchase price, and 6 percent came from Argentine banks Comafi SA and Banco Supervielle SA, he said. Those banks are advising the company now, but the conglomerate is open to speaking to other advisers as well, he said.
Representatives from the banks and the beverage company didn’t immediately reply to calls and emails seeking comments.
Luque, 66, started his empire by quitting his job as a truck driver and becoming a PepsiCo Inc. distributor in the 1970s. His conglomerate is based in Argentina’s Tucuman province, in the country’s northwest.
Ramping up in the sugar business makes sense after President Mauricio Macri’s administration increased the minimum amount of bioethanol in gasoline to 12 percent from 10 percent, a figure that the government has pledged to increase to 21 percent, Luque said. Luque also plans to burn sugar cane byproducts to fuel electric power generation, he said.
“There is no time-frame to reach a certain percentage in the mix,” Alejandro Bianchi, a spokesman for the Energy Ministry, said.
The company, which has 3,500 employees and will probably finish 2017 with annual sales of around $351 million, Luque said, plans to divide its operations into three units in November, to help clarify for future investors how the business works.