Argentine power generator Albanesi SA has become the first corporate casualty of a federal corruption investigation after its chairman was arrested on Wednesday, forcing the company to cancel a planned bond sale.
The debt deal was scrapped after Armando Loson, Albanesi’s chairman and head of the family that is the controlling shareholder, was detained together with 10 business executives and former public employees as part of an alleged graft case that is still under seal. The company’s $336 million of bonds due in 2023 tumbled to trade as low as 87.88 cents on the dollar, down from par earlier last month, according to Trace data compiled across several smaller trades on Wednesday.
Albanesi officials declined to comment by phone.
The detentions followed a report in local papers which revealed that a driver of a former official at the Planning Ministry led by Julio de Vido, who is already under arrest, kept detailed notes on funds given to public and private officials. In June 2016, Argentina was rocked when former Public Works Secretary Jose Lopez was caught hurling bags of money over the walls of a monastery in a sleepy town outside Buenos Aires. Federal Judge Claudio Bonadio is leading the new investigation.
Albanesi canceled the sale of as much as $70 million of dollar-denominated local bonds with an 18-month maturity that was planned to happen Thursday, according to a filing to the local exchange. The bond deal is now uncertain, according to people with knowledge of the situation, who asked not to be named as the matter is private.
Proceeds from the bond sale were going to be used to repay an $80 million maturity the company faces on Oct. 25. Albanesi had $25 million in cash as of the end of the first quarter.
--With assistance from Brian Smith.
To contact the reporters on this story: Pablo Gonzalez in Buenos Aires at pgonzalez49@bloomberg.net;Carolina Millan in Buenos Aires at cmillanronch@bloomberg.net
To contact the editors responsible for this story: Nikolaj Gammeltoft at ngammeltoft@bloomberg.net, Rick Green
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