MONTEVIDEO – Uruguayan lawmakers have approved a bill to recapitalize state-owned oil company Ancap, the South American country’s largest corporation, by writing off the company’s $622 million debt to the Economy and Finance Ministry.
The lower house of Congress approved the legislation during a special session on Saturday that lasted more than 14 hours.
The legislation had already been approved by the Senate and will now be sent to the president for promulgation.
In addition to the debt write-off, the government has requested a $250 million loan from the CAF-Development Bank of Latin America to reduce Ancap’s heavy dependence on private lenders.
The plan to bail out Ancap, whose operations between 2000 and 2015 were the subject of a legislative investigation, does not include the removal of current top executives.
The legislation was approved in the 99-seat lower house of Congress with “yes” votes from the 50 members of the governing Broad Front.
Ancap, a maker of petroleum products, Portland cement and alcoholic beverages, ended 2014 with a net loss of $323 million.
In 2013, the company, which has a local monopoly on oil and gas refining and distribution, posted a net loss of $170 million.
Ancap’s board has blamed the company’s widening net losses on factors such as fluctuations in the value of the Uruguayan peso relative to the dollar and investment spending during the 2010 to 2014 period.