Agrenco Executives Arrested in Brazil

Two leading executives at Brazil-based agricultural trading company Agrenco were arrested last week in Sao Paulo. Antonio Iafelice, CEO and Antonio Augusto Pires, COO, were taken in amid investigations into an alleged illegal trading ring, according to local press, which cites the federal police. An Agrenco spokesperson in Sao Paulo confirms the arrests. The Franco-Brazilian soft commodities trading company, headquartered in Bermuda, went public last October via a BDR listing. It delivered poor quarterly results and saw its stock drop to BRL2.35 from BRL10.40 before news about the arrests broke. “The company was highly levered and had falling cashflow metrics,” says a Brazil-based equity investor. “For a trading company, cashflow is everything.” Agrenco went public via Credit Suisse, which provided a pre-IPO loan of $30m at Libor plus 200bp in May 2006.