Swiss trader Sucafina to acquire Mercon's Mercafe Vietnam

Sucafina's local company is carrying out the acquisition. The deal follows Mercon's move to file Chapter 11 bankruptcy in New York late last year, driven by sharp pricing volatility and increasing borrowing costs that impacted the company's debt repayment capacity.

As reported by Bloomberg, the deal comes at a time when the robusta market has heated up, with futures traded in London rising as much as 50 per cent 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.

With the transaction, Mercon will have the best opportunity to maximise the sale price and mitigate risks to creditor recoveries associated with delays, according to a May 10 court filing approving the stock purchase agreement. Sucafina has confirmed the transaction. The terms have not been disclosed.

Sucafina has built a complex of green coffee bean processing factories in VIetnam with a capacity of 50,000 metric tonnes per year (mts/year), a steam processing line with a capacity of 6,000mts/year and warehouse facilities that can store up to 25,000mts.

Sucafina has been growing its business in recent years, acquiring US coffee importer Sustainable Harvest and scooping up a majority stake in Complete Coffee Ltd., a UK merchant recognised for supplying Costa Coffee.

The Swiss trader has also established offices in China, India, Indonesia, and New Zealand.

Meanwhile, Mercon Coffee has been actively pursuing an orderly sale of its assets since its bankruptcy filing in December.

In addition to the sale of Mercafe Vietnam Ltd., Mercon is also divesting some contracts, inventory, equipment, and intellectual property to a unit of broker StoneX Group Inc. for a final cash amount of $5.4 million.

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