Garovaglio y Zorraquin S.A.

What it is

Garovaglio y Zorraquín traces its roots to 1882, making it one of Argentina’s oldest surviving business groups, with commercial control held by the Zorraquín family throughout the twentieth century. Over the decades the group passed through sugar trading, agro-industrial production, and petrochemicals — including stakes in Petroquímica Bahía Blanca and Polisur — before exiting those sectors in the 1990s.

Today it is a holding company whose subsidiaries raise wheat, corn, sunflowers, cattle, and citrus, manufacture air conditioners and heating devices, provide insurance, and produce polyethylene. In practice, the group’s economic engine is Rheem S.A., the well-known Argentine maker of water heaters and boilers, in which Garovaglio holds a 70% controlling stake alongside the US licensor Rheem Manufacturing Company at 30%.

Who owns it

Federico Zorraquín is both chairman and controlling shareholder, holding approximately 48% of the company. He reached that position after launching a voluntary public tender offer in July 2021, acquiring a further 11.5 million shares and lifting his total stake to above 76% after the offer closed successfully in August 2021.

The stated aim of the tender was to buy out the remaining freely traded shares — roughly 51% of the capital at the time — and take the company private, withdrawing it from public-market disclosure obligations. The shares have been listed on the Buenos Aires exchange since 1944.

Who runs it

Federico Zorraquín serves as chairman (presidente) of the board. Detailed executive management names below board level are not disclosed in available public sources; the company has no active investor-relations website.

The money, in plain words

On trailing sales of ARS 84.6 billion (~$57.9M USD), the group keeps less than 1 cent of profit per peso — a net margin of 0.72%, razor-thin even for an industrial holding (our calculation). For every peso that owners have put in, the business earns about 6 cents a year — a return on equity of 6.3%, modest by any standard.

The annual income statements tell a sharper story: the most recent fiscal year ended with a loss of roughly ARS 947 million (US$648 k), deepening a prior-year deficit of ARS 335 million (US$229 k), driven largely by financial costs from exchange-rate movements. Revenue fell roughly 11% from FY2024 to FY2025 in nominal peso terms — from ARS 88.8 billion (US$61 mn) to ARS 79.0 billion (US$54 mn) (~$60.8M to ~$54.1M USD, our calculation).

The only cash on the balance sheet is ARS 229 million (~$156K USD), a very thin cushion for a group with active subsidiary debt obligations.

What it is doing now

Rheem S.A. entered 2026 in acute financial stress: it notified Argentina’s securities regulator (CNV) of a technical default after missing payments on several loans that fell due in December 2025, dragging down the group’s share price. The unpaid debts include roughly $6.9M owed to the US licensor Rheem Manufacturing Company and about $4.8M owed to Federico Zorraquín himself, both at 5.25% interest.

The underlying pressure is structural: Rheem’s dollar-denominated licence fees became unaffordable as Argentina’s peso devalued, while consumer demand for durable goods — boilers, water heaters — contracted sharply. Even so, Rheem’s peso sales in the most recent half-year rose 1.7%, and its gross margin widened from 29.2% to 32.8%, suggesting some operating resilience beneath the financial noise.

What to watch

• Debt restructuring at Rheem. Rheem’s management is negotiating with creditors to restructure subordinated commercial debts, particularly those linked to the Garovaglio group itself. The outcome will determine whether the subsidiary survives as a going concern.
• Delisting risk. With Federico Zorraquín having already launched a tender offer to buy out the public float and take the company private, any further share accumulation could complete the exit from public markets.
• Argentina macro. The group’s peso revenues, dollar debts, and thin margins make it acutely exposed to exchange-rate swings and consumer confidence — both of which remain volatile under the Milei government’s adjustment programme.
• Governance opacity. No company website, no disclosed CFO, and near-zero analyst coverage make independent monitoring difficult for minority shareholders.

This is news, not investment advice.