SAO PAULO (Reuters) - Terra Forte, one of the largest Brazilian coffee exporters, has filed for bankruptcy protection in a Sao Paulo state court, lawyers for the company said on Wednesday.
Law firm Freire, Assis, Sakamoto e Violante said Terra Forte was looking to restructure 1.1 billion reais ($288.2 million) in debt. It also said the exporter was seeking to raise 60 million reais in working capital from investors to maintain operations.
Terra Forte is a well-known player in the international coffee market. Based in Sao Joao da Boa Vista, Sao Paulo state, the company has a branch in Poços de Caldas, in the main coffee belt of Minas Gerais state, and a terminal in Santos, the largest coffee exporting port in Brazil.
Some coffee traders in London said in recent days that they heard Terra Forte had problems fulfilling contracts with European importers, and cited that as a reason behind a short-covering movement in the coffee market in recent sessions.
The exporter has a capacity to ship around 2.5 million bags of green coffee per year and was among the five largest players in the Brazilian export market.
Despite being a trader, Terra Forte is a large coffee producer, managing seven farms in the states of Sao Paulo and Minas Gerais.
A spokeswoman at Terra Forte headquarters in Sao Joao da Boa Vista declined to comment.
The law firm taking care of the bankruptcy protection case released a short note saying the exporter was seeking financial backing to continue operations, hoping to raise short-term capital from investors while it tries to renegotiate its large debt.
“When the restructuring is complete, the company has the objective to find a strategic partner in the market,” said the note.
The bankruptcy filing comes as benchmark New York arabica prices hover around the lowest levels in 13 years, with producers worldwide complaining that selling values are below production costs.
($1 = 3.8167 reais)
Reporting by Marcelo Teixeira and Roberto Samora; Editing by Sandra Maler and Richard Chang