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Flavor of the Month

Apr 29, 2004

Argentina is coming in from the cold and investment is trickling back into the country. That still won't help the government's angry bondholders much.

Heladerías Freddo, a chain of classy ice cream parlors, helps make the long hot summers more bearable in Buenos Aires. Mounds of rich ice cream in a dizzying range of flavors have cooled Porteños for years, and with time Freddo has become a beloved Buenos Aires institution.

However, the company has not been particularly easy on its owners or creditors. The Exxel Group, the Argentine private equity firm, bought Freddo in the 1990s and opened new stores, including three in Uruguay. But Exxel loaded Freddo with debt and it went bust in the 2001-2002 financial crisis, falling into the hands of its creditor banks. Last February, the banks gratefully unloaded Freddo to Pegasus Capital, a private equity firm specialized in taking over distressed assets.

Last year, Pegasus, run by a team Americans and Argentines, took over another Buenos Aires institution when it bought the Musimundo chain...

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