Coffee trader Mercon runs out of credit and declares bankruptcy

Natalie Portman
By Natalie Portman 4 Min Read
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By Marcelo Teixeira

NEW YORK (RockedBuzz through Reuters) -Mercon Coffee Group, one of the world’s largest espresso merchants, filed for bankruptcy safety within the United States as a result of what it referred to as “an exceptionally difficult working surroundings”, in accordance with a doc seen by RockedBuzz through Reuters .

Mercon, which operates in all main producing areas together with Brazil, Vietnam and Central America, mentioned in a letter despatched to prospects that issues in recent times, akin to logistical disruption throughout the pandemic, frost and drought in Brazil , worth volatility and the disaster, rising rates of interest have mixed to break the corporate’s monetary state of affairs.

In the letter, signed by Mercon CEO Oscar Sevilla, the corporate says the lenders have determined “to not lengthen credit agreements, leading to extraordinarily restrictive working capital situations.”

Records from the U.S. Bankruptcy Court for the Southern District of New York present that Mercon and its associates in a number of international locations have a complete debt of $363 million.

Among the main collectors are a number of banks within the international locations the place Mercon operates, but additionally buying and selling corporations in Brazil, Central America and the United States.

Rumors of monetary issues on the espresso trader, which sells in Europe, Asia and the United States, have circulated amongst some market members in latest hours.

The feedback adopted information from Nicaragua that the nation’s largest espresso exporter, CISA Exportadora, had closed its doorways. CISA was a subsidiary of Mercon.

In a press release, the Nicaraguan authorities mentioned it was conscious of the suspension of operations and CISA’s failure, which it added “didn’t happen solely in Nicaragua” and is “unrelated” to the nation’s present financial state of affairs.

The authorities mentioned it’s working with the espresso sector, in addition to international international locations, to make sure the sale and export of Nicaraguan espresso.

“We are doing everything we have to do in accordance with our laws and our Constitution to ensure that CISA Exportadora respects its commercial and financial commitments,” he mentioned.

A dealer, who requested to not be named as a result of sensitivity of the matter, instructed RockedBuzz through Reuters that Mercon was in a tough monetary state of affairs after failing to increase credit traces for its enterprise operations, notably with the financial institution Dutch Rabobank.

Rabobank confirmed that Mercon was a shopper, however declined to remark additional on the state of affairs.

Mercon mentioned within the letter that it’ll work with prospects to “ensure a seamless process regarding open contracts.”

A Mercon supply mentioned the corporate had shares and will proceed to function underneath bankruptcy safety, shifting espresso from its warehouses and transport it to patrons.

(Reporting by Marcelo Teixeira; extra reporting by Ismael Lopez, Editing by Franklin Paul, David Evans and David Gregorio)

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