March 5 (Reuters) – Brazilian coffee traders Atlantica and Cafebras, and its controlling holding company Montesanto Tavares Group, have filed a court request for bankruptcy protection, looking to restructure a total debt of 2.12 billion reais ($368.54 million).
According to a statement dated February 28, the first day of carnival celebrations in Brazil that only ended on Wednesday, the companies said failure by Brazilian coffee farmers to comply with contracts to deliver coffee to them made their financial situation unsustainable.
The companies also said the sharp increases in coffee prices and the devaluation of the local currency against the dollar late last year were additional challenges for their finances.
Atlantica and Cafebras had previously obtained a grace period from a local court to try to renegotiate debts with banks and other creditors, looking to avoid the bankruptcy protection process. That attempt was apparently unsuccessful.
Montesanto Tavares is a large vertical coffee holding company in Brazil which also owns coffee farms in the country and the import company Ally, which has offices in the United States and the United Kingdom.
The statement did not mention Ally.
The sharp increase in coffee prices can bring troubles for traders, particularly if they do not receive coffee from farmers in contracts agreed months ago, when prices were lower.
A smaller coffee merchant in Brazil, named Central do Cafe, said last month that it was suspending operations temporarily while it sought to renegotiate debts.
($1 = 5.7524 reais) (Reporting by Marcelo Teixeira and Maytaal Angel; Editing by Daniel Wallis)
