Sept. 14 (Bloomberg) -- Adecoagro SA, the South American farm venture backed by billionaire George Soros, pulled out of a project to build a dam and grow rice in Argentina after the government said the development may harm the environment.
Adecoagro, whose headquarters are outside Buenos Aires, opted out of the project known as Ayui Grande in northeastern Argentina because it doesn’t want to participate in a controversial development, a company official, who can’t be named under corporate policy, said in a phone interview today.
The project would cause “serious and irreversible” damage to the Uruguay River and affect water quality, Argentina’s Environment Secretariat said in an Aug. 25 statement published in the official gazette. The government also said the project in Corrientes province is incompatible with a bi-national treaty signed with Uruguay and international environmental laws.
Adecoagro owned a 20 percent stake in Ayui Grande through its subsidiary Pilaga SA, according to a June 29 U.S. regulatory filing. The project has five partners, including operator COPRA SA. Pilaga didn’t have restrictions for leaving the project, the filing said. All project decisions required approval by Pilaga and Copra, it said.
Soros is the biggest stakeholder in Adecoagro, with a 22.8 percent stake. The company, which held a $424 million initial public offering in New York in January, produces sugar, coffee, soybeans, corn, rice and milk on farms in Brazil, Argentina and Uruguay.
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