The first privatization of the Javier Milei era is moving forward: Mendoza approved the transfer of IMPSA

The Mendoza province, governed by the radical Alfredo Cornejobecame the scene of the first privatization of the Javier Milei era. This Tuesday, the Mendoza Senate passed a bill driven by the Executive Branch that authorizes the transfer of the “Class C” shares of IMPSA, Currently in the hands of Provincial state.

Currently, the company dedicated to the generation of energy from renewable resources has divisions dedicated to renewable energy, hydro, nuclear energy, oil & gas, automation and artificial intelligence, among others. In detail, the project allows the transfer of 21.4% of the total share package to the Province.

IMPSA: the first privatization of the Milei era

The bill had already been partially approved by the Chamber of Deputies, which debated the privatization of IMPSA almost two weeks ago. Now, it was the turn of the Upper House of Mendoza, which finally approved the bill promoted by the Cornejo’s Executive Branch.

Currently, the province has a 21.4% of the company’s share packagewhich has 720 employees highly trained and specialized in the energy industry. The measure was approved by a close vote: they were 19 votes in favor and 16 against.

During the session the senator Angela Floridiapresident of the Finance and Budget Committee, recalled that in 2020 the company faced serious financial problems due to failed contracts with Brazil, Venezuela and Santa Cruz, which put at risk both the job stability and the operational continuity of IMPSA. Faced with this situation, it was the National and Provincial Executive Power – led at that time by Cornejo – those who intervened with a plan to recompose the capital structure.

According to the legislator, the objective of the state intervention was “temporary“and now the government is seeking to sell the shares under its jurisdiction. However, the decision to sell the State’s shares is also explained by the liabilities exceeding the US$500 million that buyers will have to go out and negotiate with creditors.

This process began at the beginning of July when the National Government and that of Mendoza signed a letter of intent with the North American company, ARC Energywhich committed an investment of US$30 million to capitalise on the former Pescarmona. This negotiation process with the American company takes place in the midst of a complex economic situation that the company, which has more than 700 employees, is going through.

The project in detail and the PRO’s criticism

As approved by both chambers of the legislative power of Mendoza, the text authorizes the transfer of the 454,300,000 “Class C” shares in the hands of the province. According to the details from the Mendoza Senate, the sale process will be carried out under “the principles of transparency, equality, publicity and competition”

The grounds of the law detail that the intervention of the company had as “fundamental objective“increase the “share capital of the company by issuing shares corresponding to a new class ‘C’ of non-transferable registered ordinary shares, which the Province of Mendoza agreed to partially subscribe to.” In addition, the government – promoter of the project – argued that the assistance of the funds that the province integrated were destined “to cover operating costs, payment of salaries, taxes and contributionsand the projects underway. Without this assistance, it would not have been possible to maintain the more than 720 direct jobs“.

The twists and turns in the management of IMPSA generated strong criticism from the PRO of Mendoza. Gabriel Pradines, president of the Mendoza party, came out to meet Cornejo: “From statists to privatizers. A brief history of Mendoza’s radicalism. Today, they are tearing their clothes to offer @JMilei the privatization,” he said.

“Today, only three years later, it is undignified to observe Alfredo Cornejo’s chameleon-like pirouette wanting to appear as the standard-bearer of the free market,” added the head of PRO Mendoza about the Governor. Finally, in his message Pradines made it clear that they are in favor of “IMPSA becomes private again” but also demanded that the “Mendoza radicals pay the cost of their harmful opportunism“.