By Marcelo Teixeira
NEW YORK (Reuters) -Mercon Espresso Group, one of many world’s largest espresso merchants, has crammed for chapter safety in the US as a consequence of what it outlined as “exceptionally challenging operating environment”, in accordance with a doc seen by Reuters.
Mercon, which has operations in all the main producing areas together with Brazil, Vietnam and Central America, mentioned in a letter despatched to purchasers that issues lately such because the logistical disruption throughout the pandemic, frost and drought in Brazil, worth volatility and rising rates of interest all mixed to harm the corporate’s monetary scenario.
Within the letter, signed by Mercon’s Chief Government Oscar Sevilla, the corporate mentioned that lenders have elected “not to extend credit agreements, resulting in extremely tight working capital conditions”.
Court docket paperwork from the U.S. Chapter Court docket for the Southern District of New York present Mercon and its associates in a number of nations have a complete debt of $363 million.
Among the many largest collectors are a number of banks within the nations the place Mercon operates, but in addition commerce firms in Brazil, Central America and the US.
Rumors of monetary issues on the espresso dealer, which has gross sales operations in Europe, Asia and the US, circulated amongst some market individuals within the final hours.
The feedback adopted information from Nicaragua that the nation’s largest espresso exporter, CISA Exportadora, had closed doorways. CISA was a subsidiary of Mercon.
One dealer, who requested to not be named because of the sensitivity of the problem, instructed Reuters that Mercon was in a tough monetary scenario after failing to increase credit score strains for its buying and selling operations, significantly with Dutch financial institution Rabobank.
Rabobank confirmed Mercon was a consumer, however declined to remark additional on the scenario.
Mercon mentioned within the letter that it’s going to work with purchasers to “ensure a seamless process concerning open contracts”.
A Mercon supply mentioned the corporate had shares and can proceed to function below chapter safety, shifting espresso from its warehouses and transport it to consumers.
