Chapter 15 for Brazilian beef company4 March 2009
Brazilian beef producer Independencia SA have filed for Chapter 15 bankruptcy in a New York City court amid a decline in beef exports and a burdensome debt load, according to Reuters. Meanwhile, the Sao Paulo-based company commenced a restructuring process under Brazilian insolvency law. In filing the Chapter 15 proceeding, Independencia seeks from US courts recognition of their Brazilian reorganization.
According to Reuters, the company said their total debt was around $1.2 billion, about half of which was in Brazil and half of which was in the form of private debt issues in the United States and other countries outside Brazil.
Independencia said sales fell 41% between October 2008 and January 2009, and that non-payment in exports had surpassed 20% of total sales in the fourth quarter of 2008.
The company said in its filing that it ‘has witnessed as a result of the current economic crisis a dramatic disruption in the international beef markets with Brazilian exports decreasing by approximately 34% in volume terms, since September 30, 2008.'
Independencia said that some 86% of their debt was in US dollar-denominated trade lines and the Brazilian real recently depreciated against the US dollar.
Court documents show that the company owe nearly $105 million to J P Morgan Chase Bank and around $99 million to Citibank.