Cups of cappuccino are seen at a Juan Valdez retailer in Bogota, Colombia June 5, 2019. Image taken June 5, 2019. REUTERS/Luisa Gonzalez/File Photograph Purchase Licensing Rights
NEW YORK, Dec 7 (Reuters) – Mercon Espresso Group, one of many world’s largest espresso merchants, has filed for chapter safety within the U.S. as a result of what it outlined as “exceptionally difficult working atmosphere,” 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 in recent times such because the logistical disruption through 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 lenders have elected “to not prolong credit score agreements, leading to extraordinarily tight working capital circumstances.”
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 international locations have a complete debt of $363 million.
Among the many largest collectors are a number of banks within the international locations the place Mercon operates, but additionally commerce corporations in Brazil, Central America and the USA.
Rumors of monetary issues on the espresso dealer, which has gross sales operations in Europe, Asia and the USA, 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.
In a press release, Nicaragua’s authorities mentioned it was conscious of CISA’s suspension of operations and chapter, which it added was “not simply occurring in Nicaragua” and was “overseas” to the nation’s present financial scenario.
The federal government mentioned it was working with the espresso sector, in addition to with overseas international locations, to make sure the sale and export of Nicaraguan espresso.
“We’re doing every part in accordance with our legal guidelines and structure that we have to do to make sure that CISA Exportadora meets its enterprise and monetary commitments,” it mentioned.
One dealer, who requested to not be named because of the sensitivity of the problem, advised Reuters that Mercon was in a troublesome 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 shopper, however declined to remark additional on the scenario.
Mercon mentioned within the letter that it’ll work with purchasers to “guarantee a seamless course of regarding open contracts.”
A Mercon supply mentioned the corporate had shares and can proceed to function beneath chapter safety, transferring espresso from its warehouses and transport it to consumers.
Reporting by Marcelo Teixeira; further reporting by Ismael Lopez, Modifying by Franklin Paul, David Evans and David Gregorio
Our Requirements: The Thomson Reuters Belief Ideas.
