Atlantica and Cafebras, Brazilian coffee exporters within the Montesanto Tavares Group, have filed for bankruptcy due to a financial crisis marked by contract defaults and debt of 2.13 billion reais. Attempts to negotiate with creditors were unsuccessful, leading to the current proceedings in a Brazilian court.
Brazilian coffee exporters Atlântica Exportação e Importação SA (Atlantica) and Cafebras Comércio de Cafés do Brasil SA (Cafebras), both affiliated with the Montesanto Tavares Group, have initiated bankruptcy proceedings. They are seeking creditor protection, with an outstanding debt amounting to 2.13 billion reais (approximately US$367 million).
Notably, Ally Coffee, the U.S. subsidiary of the Montesanto Tavares Group, has not been included in this bankruptcy filing. The companies issued a statement on February 28, indicating that their decision was prompted by a “financial crisis” attributed to numerous contract rollovers and defaults by coffee producers, largely due to rising benchmark prices and currency devaluation against the dollar.
In preparation for potential insolvency, both companies previously requested a grace period from the Brazilian courts to negotiate their debts with key creditors, including Banco do Brasil, BTG Pactual, and Banco do Nordeste. Following unsuccessful negotiations, they proceeded with their bankruptcy filing at a district court in Belo Horizonte, Brazil.
In conclusion, Atlântica and Cafebras have faced significant financial difficulties leading to their bankruptcy filing, exacerbated by elevated coffee prices and unfavorable currency exchange rates. Despite attempts to negotiate with creditors, those efforts did not yield the needed results. This situation highlights the vulnerabilities within the coffee trade and its broader economic implications.
Original Source: dailycoffeenews.com
