By Tom Johnston on 3/3/2009
MeatingPlace.com
Brazilian beef producer Independencia S.A. has 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 U.S. courts recognition of its Brazilian reorganization.
In its filing, according to Reuters, the company said its total debt was about $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 percent between October 2008 and January 2009, and that non-payment in exports had surpassed 20 percent 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 percent in volume terms, since September 30, 2008."
Independencia said its debt rose because some 86 percent of its debt was in U.S. dollar-denominated trade lines and the Brazilian real recently depreciated against the U.S. dollar, according to Reuters.
Court documents showed the company owes nearly $105 million to JPMorgan Chase Bank and roughly $99 million to Citibank.
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