Restructuring Debt of Brazilian Coffee Traders

By Marcelo Teixeira

(Reuters) – Two Brazilian coffee traders, Atlantica and Cafebras, are seeking court-supervised debt restructuring. They owe banks a total of 1.1 billion reais (about $181.6 million).

This debt consists mainly of advance payments tied to future coffee exports, known as ACCs. Banco do Brasil SA holds the largest share, with 765 million reais, followed by Banco BTG Pactual with 181.5 million reais and Banco do Nordeste with 100.9 million reais.

The restructuring request, filed by coffee group Montesanto Tavares, could lead to bankruptcy proceedings if negotiations fail. The coffee market is anxious over potential delivery issues and financial troubles among exporters amid rising coffee prices.

Bank representatives did not comment on the situation. Atlantica and Cafebras indicated that the surge in coffee prices has complicated their operations, particularly affecting their hedging strategies.

A coffee broker expressed surprise over the significant credit amount extended to the traders, particularly from Banco do Brasil, stating, "It is a huge amount for companies that are not that big."

($1 = 6.0580 reais)