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Montevideo, October 6th 2022 - 16:21 UTC

 

 

Partners want to sever all Cartes partnerships

Monday, August 15th 2022 - 08:47 UTC
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Luksic is one of Chile's wealthiest men (Pic Agencia Uno) Luksic is one of Chile's wealthiest men (Pic Agencia Uno)

Chilean business associates of disgraced former Paraguayan President Horacio Cartés would be pushing to break up all commercial ties with the man declared as “significantly corrupt” by the US State Department last month.

 Cartés, who has since been banned from entering the US along with his family, has also been linked to alleged terrorist organizations and his name has come up in the Emtrasur scandal, a Boeing 747 freighter grounded at Buenos Aires' Ezeiza International Airport after landing in Argentina with a crew of 5 Iranians and 14 Venezuelans.

In this scenario, businessman Andrónico Luksic of the investment holding company Quiñenco would be trying to disassociate his firm from anything involving Cartés, with whom he first partnered in 2013 through the brewery Compañía de Cervecerías Unidas (CCU). In 2018 they expanded their partnership through Enex, a gas station chain. In both cases, each party has 50% of the shares.

Luksic, one of Chile's wealthiest men, and a group of executives from Quiñenco, CCU, and Enex Chile visited Paraguay earlier this month to meet with Cartés.

According to Santiago's La Tercera, Cartes and Luksic would break their partnership. “Although the reason was not disclosed, only one issue makes sense in business circles: the shareholders must have asked the boards of directors to have access to the economic information of the companies. It is the prelude to due diligence to dismantle the company and buy one from the other.”

“The Luksic Group is looking for a prompt solution, but not a hasty one. They know it is a complex problem with complex solutions. But everything points to the dissolution of the alliance...,” La Tercera went on.

The question now is who will buy over the other's 50%. Cartés is not believed to have enough assets to become a full owner, which leaves an exchange as the most feasible solution. In that case, Luksic would prefer to keep the bottling company, “a business in which being a regional player is more relevant than the distribution of fuels.”

”CCU trades its shares in New York under the figure of ADRs (American depositary receipt, a figure that allows it to operate in the U.S. market). And Enex has direct operations in that country. An accusation by Joe Biden's government against a direct partner of its companies requires almost a single measure: to undo the company,“ adds La Tercera.

Heineken controls CCU in Chile together with Luksic's Quiñenco. ”The European multinational participates in CCU's board of directors - each party elects four directors and the ninth is by consensus - and has direct licenses with the company in which Cartes participates. Therefore, its opinion is relevant when deciding the future of the alliances.“

According to Diario Financiero, Luksic's intention to split from Cartes has to do with his conglomerate's intention to implement a mining project called ”Twin Metals.“

”It is the Twin Metals project, which has brought more than one headache to the businessman (Luksic). This, because although it was first approved to operate in the Trump administration, the current administration took a step back for being in a nature reserve, and the process is in court. Luksic has hired heavyweight lobbyists and environmentalists in the US to convince that his project is responsible,” DF concluded.

Meanwhile, a shipment of contraband cigarettes seized by Chilean authorities at a border crossing with Bolivia last week included 135,000 packs of the Eight brand, manufactured by Cartés' tobacco company Tabesa SA. Cartés' cigarettes were one of the last products carried abroad by the Emtrasur 747.

Categories: Politics, Paraguay, Chile.

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