(Bloomberg) -- Brazil coffee exporters owned by Montesanto Tavares Group Participações SA were granted a 60-day grace period to renegotiate debt with creditors.
The decision, seen by Bloomberg News, was issued Friday by Judge Murilo Silvio de Abreu. The judge earlier this week declined a similar request for a grace period from the two companies owned by Montesanto — Atlântica Exportação e Importação SA and Cafebras Comércio de Cafés do Brasil SA.
In the earlier decision, Montesanto had asked the court to keep brokers from liquidating the exporters’ hedge positions in the coffee futures market, as well as protection for so-called ACC contracts, which involve financing for exporters. After the initial rejection, the company came back requesting a grace period without including those issues, said Daniel Vilas Boas, a lawyer for the companies.
A steep increase in coffee prices has created difficulties for some exporters, who buy and sell physical coffee supplies and use the futures market for hedging. With arabica coffee futures climbing more than 70% this year, they are having to deal with increased costs of hedging due to higher margin calls.
--With assistance from Gerson Freitas Jr..
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