Economy Minister Luis Caputo announced that the government is set to complete its first privatization of a state-owned company: the Milei administration  and the Mendoza provincial government will sell their share of metallurgic company IMPSA to private ownership.

On Wednesday, an Economy Ministry communiqué announced that the national and provincial administrations offered a preliminary adjudication of their share of IMPSA stock, which adds up to 85% of the total. An evaluation committee recommended accepting  an offer made by United States firm Arc Energy.

IMPSA manufactures turbines, cranes, reactors, and other equipment for the metallurgic, energy, and technology sectors.

“We privatized IMPSA,” Caputo posted on X on Wednesday. 

Mendoza Governor Alfredo Cornejo also celebrated the step, as the province is a partial owner of the company. “The change in the economic path Javier Milei is carrying out gives us certainties that allow for these steps forward,” he wrote on X.

The offer was formally made by the U.S. Industrial Acquisition Find (IAF) LLC and its main partner, Arc Energy. IAF offered US$27 million in capital contribution, which will be held to an integration schedule according to the company’s needs. IAF was the only offerer.

The Mendoza government took over the company in 2021 to save it from bankruptcy and guarantee its operations. When the adjudication process is completed, IAF will be responsible for the US$576 million debt that almost led the company to go bankrupt.

IAF has requested until January 31 to get the debt refinanced. If negotiations are successful, the parties will fill out the contract and transfer the stock.

The evaluation committee considered that IAF and its main stockholders have the necessary conditions to “carry out the capitalization IMPSA needs” and manage it accordingly, the Economy Ministry said.

IMPSA was founded in Mendoza in 1907 by Italian immigrant Enrique Epaminondas Pescarmona. The Pescarmona family still holds 5.3% of the stock. The rest is currently divided between creditors (9.8%); an Economy Ministry fund for production development called FONDEP (63.7%); and the Mendoza province (21.2%).

“The decision to let go of the stock in the hands of the public sector is in line with the national government’s goal of zero deficit and not providing federal resources to private companies,” the Economy Ministry said. This, it continued, gives the company the possibility to “continue operating in a market economy framework.”