RADICE S.A.E.C.A.

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What it is

Radice S.A.E.C.A. was created in 2018 with the single purpose of building Encarnación’s first mixed-use commercial, corporate, and entertainment complex, a project it calls Shopping Costanera, Parking Costanera & Executive Center Office — three revenue streams inside one 20-storey building.

The shopping mall alone offers nearly 10,000 m² of leasable area across five floors, with rents fixed at USD 12 per m² or 7% of a tenant’s sales, whichever is higher. The full complex includes 86 retail units, 8 gourmet restaurants, a food court, parking for 400 vehicles, and five cinema screens.

Who owns it

A June 2024 rating report confirmed a material shift in control: Grupo Vázquez S.A.E. was approved as the new controlling shareholder, following a statutory amendment for capitalisation and an agreed commitment that also brought changes to the board.

Before that change, rating agency FIX SCR noted that shareholding was “atomised, without a clear majority holder.” The two original principal shareholders — Horacio Biga (Presidente) and Carlos Soler (Vicepresidente) — remain personal guarantors, jointly and severally liable, on the company’s outstanding bonds. Not published: the precise ownership percentages of Grupo Vázquez and remaining minority shareholders are not disclosed in the BVASA filings or the rating reports reviewed.

Who runs it

In the most recent material event filed with the Bolsa de Valores de Asunción, the exchange disclosed that Guido Martínez López had left his post as General Manager (Gerente General), replaced by Susana Lorena Montiel Martínez.

The project was originally conceived by Argentine entrepreneur Horacio Biga Di Chiara, who continues as board president. Not published: the names of the CFO and full board composition are not disclosed in available exchange or regulator filings; Paraguay’s securities law (Ley 1284/98) requires listed issuers to disclose directors but does not mandate individual-officer CVs in periodic reports.

The money, in plain words

Radice earns money three ways: renting shop space, selling parking slots (at USD 20,000 each), and selling corporate offices (at roughly USD 180,000 apiece). In 2024 alone, the company projected some USD 4.05 million from office sales at the Executive Center — after which office-sale revenue will decline as the inventory runs out.

Revenue nearly doubled in the first half of 2024 — a net profit margin of about 5.8% on H1 revenue of Gs. 7,473 million (~USD 1.23 million), our calculation — but most of that profit is consumed by interest costs.

The rating agency flags high indebtedness relative to operating results and equity; equity financing covered only about 21.6% of assets at mid-2024, well below the company’s own stated 70% target. The debt-to-equity (leverage) ratio stood at 3.64x, meaning for every guaraní of owners’ money in the business, creditors have put in Gs.

3.64 — high for a property operator still ramping revenues.

The company raises money through the public bond market: its first placement was a USD 3 million corporate bond issue on the BVASA, at a 7.25% annual rate, six-year maturity. Investor demand at that launch was 2.5 times the amount on offer.

The overall bond programme is authorised for up to USD 15 million.

What it is doing now

By end-2023, the shopping floors and corporate tower had been partially opened; the full complex was expected to reach operational status during 2024. The shopping mall’s rental income was forecast to grow 43% in 2025, driven by filling the units currently sitting empty.

The company’s dividend policy permits paying out up to 50% of the prior year’s profit, but the April 2024 shareholders’ meeting voted to retain all 2023 earnings, channelling them into legal reserves and future capitalisation. The arrival of Grupo Vázquez as controlling shareholder signals an injection of fresh equity — the mechanism by which management intends to bring the balance sheet into better shape.

What to watch

• Occupancy rate. The gastronomic wing opened partially in February 2023; as of mid-2023 only 40% of those units were trading, with 12% still being fitted out and 48% unsigned. The speed at which remaining empty space fills up is the single biggest driver of cash flow.
• Debt service. Short-term debt maturities in 2024 included roughly USD 3.9 million, of which USD 2 million was owed to related parties and USD 1.9 million to banks. With lean operating cash flow, refinancing risk is real.
• Grupo Vázquez integration. The new controlling shareholder’s capital commitment — and the pace at which it converts to equity — will determine whether the leverage ratio comes down toward the stated 70/30 target in time for coming bond maturities.
• Cross-border foot traffic. The mall’s main commercial competitors are Grupo Casino’s Libertad hypermarket and Posadas Plaza Shopping, both across the Paraná river in Argentina. Shopping from Paraguay into Argentina rises and falls with the exchange-rate gap and border-crossing ease.

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This is news, not investment advice.