Atlântica and Cafebras, part of the Montesanto Tavares Group, have filed for bankruptcy, citing debts of 2.13 billion reais ($367 million). They attributed the filing to a financial crisis caused by contract defaults and high benchmark prices. Ally Coffee, their U.S. counterpart, is not involved in this filing.
Brazilian coffee exporting firms Atlântica Exportação e Importação SA (Atlantica) and Cafebras Comércio de Cafés do Brasil SA (Cafebras), both under the Montesanto Tavares Group, have recently filed for bankruptcy. The companies are seeking creditor protection due to debts amounting to 2.13 billion reais (approximately US$367 million). Notably, Ally Coffee, their U.S.-based sibling company, was not included in this filing.
In a statement released on February 28, Atlantica and Cafebras indicated that the bankruptcy filing was prompted by a “financial crisis” stemming from numerous contract defaults as producers extended coffee delivery deadlines. The companies noted that these defaults were influenced by escalated benchmark prices and the depreciation of the Brazilian real against the U.S. dollar.
Previously, in late 2022, both companies petitioned a Brazilian court for a grace period to negotiate debts with creditors, including significant banks such as Banco do Brasil, BTG Pactual, and Banco do Nordeste. As confirmed by Marcelo Teixeira of Reuters, these negotiations proved unsuccessful, resulting in the official bankruptcy filing in a Belo Horizonte district court.
In conclusion, the bankruptcy filing by Atlantica and Cafebras underscores the challenges faced by the coffee industry, particularly due to high benchmark prices and currency devaluation. The outcome of this situation will likely impact stakeholders across the coffee supply chain, highlighting the fragility of financial negotiations in the sector.
Original Source: dailycoffeenews.com
