Chilean grower and exporter Guillermo Prohens Somella SA will auction off its main growing lot, Fundo Huancara, this month, the latest step in a bankruptcy process that started in June 2010, leaving a growing debt with its main northern receiver, the Oppenheimer Group , among others.

“It was not an easy decision to make,” Oppenhemier’s manager in Chile, Ray Reed, said of the bankruptcy request it made to Prohens. The grower is known for planting  grapes in the north of Chile, near the community of Vicuña, in the northern Region of Coquimbo.

Four years ago Oppenheimer started to deliver financial assistance to Prohens, but  the growing debt grew unsustainable. “We wanted to keep helping but the numbers were difficult to maintain. ... Each year we were delivering more and more and the debt with Oppenheimer grew quite large,” the executive told PortalFruticola.com in an exclusive interview.

Reed said that “the process has been a terrible experience” and has meant “great losses for the Prohens family, for all its creditors large and small and ex-employees. Everyone lost.”

Andrés Orchard--a financial adviser who worked with the lawyer representing the bankrupted company, Herman Chadwich--said that Oppenheimer looked for other alternatives before requesting the bankruptcy.

Orchard and Reed both agreed that there were a series of factors that brought Prohens to its precarious situation. In Orchard’s view, the overall prospect for fruit growers is “complicated,” due to a poor exchange rate and increased labor costs, among others factors.

According to Reed, the fruit business has changed and margins are very tight for the Chilean industry. “There are companies that can keep on operating but there are others that have a lot of difficulty working in these conditions.”

The Prohens Sommella family is known for being pioneers for growing table grapes in Chile’s north to export to the U.S. The company was founded by Jaime Prohens Juan 95 years ago.

Five generations of Prohens have grown grapes, and through the years have expanded the company’s crop offerings to include Hass avocado and clementines. The family also produces white wine and  pisco (grape brandy), according to its website.

Bankruptcy Details

On Jan. 17 Prohens main growing land, known locally as Fundo Huancara in Vicuña, will be auctioned off,  Orchard confirmed.

The land will be auctioned complete with water rights and the money will go to pay separation of works. Orchard believes that the most probable scenario is that it will be acquired by someone close to the family.

Prohens then will have to pay its debt to two of its main creditors: Banco BICE and Oppenheimer. Another plot of land, the Fundo Maitencillo, located near the coast in the central region of Chile has already been handed over to the local office of Spanish bank Santander, another creditor. Orchard would not specify the amounts involved in the transactions.

The next step will to be auction agricultural machinery, which should go to the buyer of the land, according to Orchard. The Fundo Huancara is currently still producing table grapes under a lease by Verfrut. The land will be passed over in March.

Repeated attempts to contact representatives of Guillermo Prohens Sommella by PortalFruticola.com went unanswered.

Source: www.freshfruitportal.com