Bankruptcy Filing: Atlântica and Cafebras Amidst Financial Crisis

Atlântica and Cafebras, both Brazilian coffee exporters, filed for bankruptcy, seeking creditor protection for 2.13 billion reais (US$367 million) in debt. The financial crisis is attributed to contract defaults and rising coffee prices. Attempts for debt negotiations failed, leading to the official filing in court.

Atlântica Exportação e Importação SA (Atlantica) and Cafebras Comércio de Cafés do Brasil SA (Cafebras), both part of the Montesanto Tavares Group, have filed for bankruptcy in Brazil. The companies are seeking protection from creditors 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 the bankruptcy petition.

In a statement released on February 28, both Atlantica and Cafebras attributed their financial distress to a crisis stemming from numerous rollovers—extensions of coffee delivery deadlines to producers—and contract defaults. These defaults have been exacerbated by high benchmark prices within the coffee sector over the past year and the depreciation of the Brazilian real against the U.S. dollar.

Last year, both companies requested a grace period from a Brazilian court to negotiate debts with creditors, including Banco do Brasil, BTG Pactual, and Banco do Nordeste. However, as negotiations did not yield a successful resolution, they proceeded with an official bankruptcy filing in a Belo Horizonte district court.

In summary, Atlântica and Cafebras have filed for bankruptcy, seeking creditor protection amidst significant financial troubles, primarily driven by payment defaults and the adverse market conditions for coffee. Despite attempts at negotiation with various banks, their circumstances necessitated an official filing, highlighting the ongoing challenges in the Brazilian coffee industry.

Original Source: dailycoffeenews.com