Brazilian coffee exporters Atlantica and Cafebras filed for bankruptcy, seeking protection due to 2.13 billion reais in debt. The filing results from a financial crisis linked to contract defaults and high coffee prices, as well as currency devaluation. Negotiations with creditors failed, leading to the official filing in a district court.
Two Brazilian coffee companies, Atlântica Exportação e Importação SA and Cafebras Comércio de Cafés do Brasil SA, have recently filed for bankruptcy, seeking protection from creditors due to overwhelmed debts totaling 2.13 billion reais (approximately US$367 million). They are affiliated with the Montesanto Tavares Group, which also includes the American green coffee importer, Ally Coffee, not included in the bankruptcy proceedings.
The bankruptcy filing, made on February 28, is attributed to a “financial crisis” caused by several issues, including numerous rollovers—extensions to coffee delivery deadlines—and defaults on contracts from producers. These defaults have been linked to elevated coffee benchmark prices and the devaluation of the Brazilian real against the dollar, impacting profitability.
Previously, both companies requested a grace period from a Brazilian court to negotiate debts with key creditors, including Banco do Brasil, BTG Pactual, and Banco do Nordeste, but these negotiations did not yield successful results. Consequently, they proceeded with the official bankruptcy application in a Belo Horizonte district court.
In summary, the bankruptcy filings of Atlantica and Cafebras highlight significant financial struggles tied to industry-wide challenges such as high coffee prices and currency fluctuations. The unsuccessful negotiation attempts with multiple financial institutions led to this decisive legal action, marking a critical moment for both companies as they seek to restructure under bankruptcy protection.
Original Source: dailycoffeenews.com
