Yahoo Finance Swiss Trader Sucafina to Buy Mercon Assets in Top Robusta Producer Vietnam
(Bloomberg) -- Swiss coffee trader Sucafina SA will purchase Mercon Coffee Corp.’s unit in Vietnam, expanding its reach in the world’s top producer of robusta beans used to make instant coffee.
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The sale of Mercafe Vietnam Ltd. comes after the Dutch trader filed for Chapter 11 bankruptcy in New York late last year, citing steep price swings and higher borrowing costs that eroded the firm’s ability to pay its debt on time in full. The acquisition is being carried out by Sucafina’s local subsidiary, according to court filings.
The deal comes at a time when the robusta market has heated up, with futures traded in London rising as much as 50% this year to a fresh intraday high at the end of May. Dry weather in Vietnam has curbed production with global supplies expected to fall short of demand for a fourth year.
The transaction provides Mercon “with the best opportunity to maximize the sale price and prevent a significant risk to creditor recoveries associated with delay,” according to a May 10 court filing approving the stock purchase agreement. Sucafina confirmed the transaction, which is yet to close. Terms weren’t disclosed.
Sucafina has been expanding its business in recent years, having acquired US coffee importer Sustainable Harvest, and purchased a majority stake in Complete Coffee Ltd., a UK merchant known for supplying Costa Coffee. The trader has also opened offices in China, India, Indonesia and New Zealand.
Mercon has been pursuing an “orderly sale of its assets” since filing for bankruptcy in December. The company is also selling some contracts, inventory, equipment and intellectual property to a unit of broker StoneX Group Inc. for a final cash amount of $5.4 million, according to a May 30 court filing approving the deal.
The case is Mercon Coffee Corp., 23-11945, US Bankruptcy Court for the Southern District of New York (Manhattan).
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