Brazilian coffee exporters Atlantica and Cafebras have filed for bankruptcy due to debts of 2.13 billion reais (US$367 million). The companies attribute this action to a financial crisis stemming from contract defaults and high coffee prices. They had previously sought grace periods for negotiations with creditors before resorting to bankruptcy.
Two Brazilian coffee exporting firms, Atlântica Exportação e Importação SA (Atlantica) and Cafebras Comércio de Cafés do Brasil SA (Cafebras), part of the Montesanto Tavares Group, have initiated bankruptcy proceedings. The firms are seeking creditor protection, facing debts totaling approximately 2.13 billion reais (US$367 million). Notably, Ally Coffee, a green coffee importer and sibling company based in the United States, was not included in the bankruptcy filing.
The bankruptcy statement, issued on February 28, cites a “financial crisis” as the impetus for this action, linked to numerous rollovers of coffee delivery deadlines and contract defaults from producers. The companies highlighted that the defaults were caused by high benchmark prices and the depreciation of the Brazilian real against the dollar, which have significantly affected the coffee sector.
In late 2022, both companies sought a grace period for debt negotiations with creditors such as Banco do Brasil, BTG Pactual, and Banco do Nordeste, as reported by Marcelo Teixeira of Reuters. Following unsuccessful negotiations, they proceeded to file for bankruptcy in a district court in Belo Horizonte, Brazil.
The bankruptcy filing of Atlantica and Cafebras underscores the financial challenges faced by coffee exporters amid rising supply costs and unfavorable currency fluctuations. Their attempt to negotiate with creditors prior to filing signifies the ongoing struggles within the industry. This development may have broader implications for the Brazilian coffee market as stakeholders respond to these challenges.
Original Source: dailycoffeenews.com
