Atlantica and Cafebras, Brazilian coffee exporters, have filed for bankruptcy protection due to debt of 2.13 billion reais. The filing is in reaction to defaults on coffee contracts and high prices affecting the industry. Attempted debt negotiations were unsuccessful, prompting the court filing in Belo Horizonte. Ally Coffee, a related US-based company, is not affected.
Brazilian coffee exporters Atlântica Exportação e Importação SA (Atlantica) and Cafebras Comércio de Cafés do Brasil SA (Cafebras), both part of the Montesanto Tavares Group, have recently filed for bankruptcy. They are currently seeking protection from creditors, citing debts amounting to 2.13 billion reais, approximately US$367 million.
The bankruptcy filing, made by the companies on February 28, is attributed to a significant financial crisis characterized by numerous rollovers—extensions of coffee delivery deadlines—as well as defaults on contracts by producers. The group indicated that the defaults stemmed from high benchmark prices affecting the coffee sector and the depreciation of the Brazilian real against the US dollar.
In late 2022, both companies approached a Brazilian court to secure a grace period for negotiating debts with several creditors, including Banco do Brasil, BTG Pactual, and Banco do Nordeste. Following unsuccessful negotiations, the companies proceeded to officially file for bankruptcy in a district court located in Belo Horizonte, Brazil.
Remarkably, Ally Coffee, a US-based affiliate of Atlantica and Cafebras within the Montesanto Tavares Group, was not included in this bankruptcy filing. This separation is noteworthy as Ally Coffee operates independently of the financial issues faced by its Brazilian counterparts.
The bankruptcy filing by Atlantica and Cafebras highlights significant challenges in the Brazilian coffee export sector, driven primarily by financial instability and unfavorable market conditions. The companies’ efforts to negotiate with creditors were unsuccessful, leading to their current pursuit of bankruptcy protection as they confront substantial debts. The distinct handling of Ally Coffee suggests potential for operational continuity, despite the issues within the parent companies.
Original Source: dailycoffeenews.com
