Bankruptcy Filings by Brazilian Coffee Exporters Atlantica and Cafebras
Atlantica and Cafebras, Brazilian coffee exporters, have filed for bankruptcy, seeking creditor protection with debts of 2.13 billion reais. The filing follows a financial crisis caused by contract defaults and high coffee prices, which impacted the industry significantly. Previous negotiations for debt relief with creditors were unsuccessful, leading to the official bankruptcy application.
The Brazilian coffee exporting companies Atlântica Exportação e Importação SA (Atlantica) and Cafebras Comércio de Cafés do Brasil SA (Cafebras), part of the Montesanto Tavares Group, have filed for bankruptcy. They are seeking protection from creditors, reporting debts amounting to 2.13 billion reais (approximately US$367 million). The green coffee importer, Ally Coffee, which is affiliated with these companies, remains unaffected by the bankruptcy filing.
The filing, announced on February 28, was attributed to a substantial financial crisis caused by numerous rollovers, which are extensions of coffee delivery deadlines by producers, alongside defaults on contracts. The companies indicated that these defaults stemmed from high benchmark coffee prices and the weakening of the Brazilian real against the dollar over the previous year.
In the latter part of last year, both Atlantica and Cafebras requested a grace period from a Brazilian court to negotiate debts with various creditors, including Banco do Brasil, BTG Pactual, and Banco do Nordeste. However, as these negotiations did not yield a favorable outcome, the firms proceeded with a formal bankruptcy application in a district court located in Belo Horizonte.
In conclusion, the bankruptcy filings of Atlantica and Cafebras highlight significant financial challenges within the coffee export sector in Brazil, primarily influenced by market conditions such as fluctuating prices and currency devaluation. Despite attempts to negotiate debt relief, the companies’ dire situation necessitated the filing for bankruptcy protection to address their liabilities.
Original Source: dailycoffeenews.com
