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The Montesanto Tavares group, a major player in the coffee industry, announced on Tuesday that it has filed for judicial recovery to address a debt of R$2.13 billion with creditors, according to Bloomberg Línea.
The group is comprised of Atlantic Export and Import, Cafebras, Montesanto Tavares Group Participations, and Companhia Mineira de Investimento em Cafés. They have a network of 2,000 coffee producers and 177 staff members.
The debt is explained by issues in the harvest, expensive coffee prices in the global market, and the devaluation of the Brazilian currency. The troubles started in 2021 due to crop damage caused by a drought, leading producers to purchase some of the needed supplies from the physical market.
The group incurred debts through advance operations in exchange contracts (ACCS) to finance their purchases. The debt increased significantly due to the high prices of Arabic coffee in 2024, causing the conglomerate’s derivative value to rise to R$470 million from R$50 million. Additionally, this method accounted for 74% of the group’s total volumes.
legal reorganization
The companies were given time to renegotiate their debt with creditors but opted for judicial recovery on February 25.
Judge Murilo Silvio de Abreu from the 2nd Business Court in Belo Horizonte has ordered a preliminary investigation. Expert Wagner Miranda Rocha from WMR Associate Experts has been assigned to provide a financial report on the group within five days.
The group requested that ACCs be included in the debts protected by judicial recovery and asked for a 60-day suspension of debt executions on their property and rights. The judge granted these requests and postponed the group’s asset delivery to creditors.
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