Mercon Coffee Group files for bankruptcy, faces $363 million in debt

Mercon Coffee Group has filed for bankruptcy, facing massive debt of $363 million amidst a challenging operating environment including logistical disruptions during the COVID-19 pandemic, frost and drought in Brazil, price volatility, and rising interest rates.

On December 8, 2566, Reuters reported that Mercon Coffee Group, one of the world's largest coffee retailers, filed for bankruptcy protection in the United States, citing an extremely challenging operating environment.

Mercon Coffee Group, which operates in all its major production regions, including Brazil, Vietnam, and Central America, stated in a letter to customers that issues in recent years, such as logistical disruptions during the COVID-19 pandemic, frost and drought in Brazil, price volatility, and higher interest rates, have negatively impacted the company's financial position.

In a letter signed by Mercon Coffee Group CEO Oscar Sevilla, the company said the lender had chosen not to extend the credit agreement. As a result, working capital conditions are extremely tight.

Court documents from the United States Bankruptcy Court for the Southern District of New York. It shows that Mercon Coffee Group and its subsidiaries in many countries have a total debt of $363 million, with the largest creditors including banks in the countries where Mercon operates, but also trading companies in Brazil, America. Central and the United States as well

One broker who asked not to be named Due to the sensitivity of the problem told Reuters that Mercon was in a difficult financial situation. After failing to extend credit lines for trading operations This is especially true of Rabobank of the Netherlands.

Reference: reuters.com