Federación de Cooperativas Vitivinícolas Argentinas Cooperativa Limitada (“FECOVITA”)
Category B projects have potential environmental and/or social impacts and risks that are less adverse than those of a Category A and which are generally limited to the project site, largely reversible and can be mitigated via measures that are readily available and feasible to implement in the context of the operation.
Projected date at which a project will be put forward for the Board of Executive Directors’ approval.
Projected board date
Veiga Perez, Matias Angel
USD $ 15,000,000
Project scope and objective
The Federación de Cooperativas Vitivinícolas Argentinas (Federation of Argentinian Vitivinicultural Cooperatives) (hereinafter Fecovita or the Cooperative) is a secondary cooperative that associates 29 primary cooperatives comprising 5,000 wine producers and winemakers in the province of Mendoza, Argentina. The production area covers 25,000 hectares of vineyards. The company bottles and markets wines and musts, with its brand "Toro" being the second top-selling mass-consumption wine in the world. Fecovita currently has four business units: i) The first ("Masivos"), is dedicated to the sale of mass consumption wines; ii) The second unit ("Bodegas"), is dedicated to the sale of medium- and high-end wines, with a significant investment in the winery located in the Tupungato department (Bodega Estancia Mendoza); iii) The third business unit ("Concentrados"), is dedicated to developing the concentrated grape juice markets; and the fourth, ("Graneles") is dedicated to the sale of bulk wines of all types.
IDB Invest financing would be used to improve the company's debt profile and rebuild its working capital. As of 12/31/2018, the total financial debt of US$62 million was 66% short-term and 34% long-term, while 42% was used for working capital and 58% for investments. The company intends to realign this financial mismatch, which was mainly generated by the "Nuevo Proyecto Toro" inaugurated in October 2018. Financing will be made effective through a Senior Loan secured for up to 7 years with a first mortgage on the Borrower's assets that comprise an economic unit.
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