Mercon Coffee files Chapter 11 bankruptcy and plans to sell assets

By Sarah Lizee

Olympia, Wash., Dec. 7 – Mercon Coffee Corp. filed Chapter 11 bankruptcy on Wednesday in the U.S. Bankruptcy Court for the Southern District of New York to pursue a sale of its assets, according to court documents.

Harve Light, the company’s chief restructuring officer, said in court documents that in 2019 it became one of the first commodity suppliers in the United States, and the first coffee-only company, to close a $450 million two-year sustainability-linked senior secured revolving credit facility with Cooperatieve Rabobank UA, New York Branch.

Since then, however, the debtors have faced several market challenges, including the global effects of the Covid-19 pandemic and the decline in the market price for coffee, Light said.

The debtors currently have about $363.34 million in outstanding funded debt, including $202.55 million under a revolver due 2024 with Rabobank.

The company is now seeking approval of a $40 million super-priority senior secured debtor-in-possession financing package with Rabobank. Of the amount, $20 million is a rollup of prepetition debt.

Mercon is seeking interim access to $10 million of the new money under the facility.

Interest is the base rate plus 900 basis points per annum, payable in cash or in kind.

The facility is set to mature in six months.

In its petition, the company listed $100 million to $500 million in assets and $100 million to $500 million in total liabilities.

The company’s largest unsecured creditors are Stichting & Green Fund, based in Amsterdam, with a $20 million subordinated loan claim, Crowdout Capital LLC, based in Austin, Tex., with a $20 million subordinated loan claim, LaFise Nicaragua Centro Financiero, based in Managua, Nicaragua, with a $19.49 million bank loan claim, London Forfaiting, based in London, with a $13 million bank loan claim and Banco Agromercantil, based in Guatemala City, Guatemala, with a $9 million bank loan claim.

Baker & McKenzie LLP is the debtors’ counsel.

Based in the Netherlands, Mercon is a vertically integrated global green coffee supplier. It filed bankrutpcy under Chapter 11 case number 23-11945.

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