Grupo Mercon, the parent company of Cisa Exportadora, has officially declared bankruptcy, leading to the imminent takeover by the Sandinista dictatorship. Following Grupo Mercon’s acknowledgment of liquidity issues, the Sandinista regime announced its assumption of Cisa Exportadora’s responsibilities to ensure the continued facilitation of commercialization and exports that were previously managed by the company.
In light of the uncertainties arising in the coffee sector due to CISA Exportadora’s closure in Nicaragua stemming from financial troubles, Mercon Coffee Group’s General Director, Oscar Sevilla, conveyed in a statement the commitment to manage an “orderly and equitable liquidation” process for their staff.
The CEO attributed the multinational’s bankruptcy to economic challenges resulting from the Covid-19 pandemic, adverse weather conditions affecting coffee crops in Brazil, fluctuating grain prices, and increased interest rates on loans.
Facing the economic predicament and unable to find a viable solution, the Board of Directors sought protection under Chapter 11 of the United States Bankruptcy Code to safeguard the company’s assets.
While the bankruptcy process is ongoing, Mercon aims to continue operations temporarily, focusing on facilitating a restructuring or liquidation process that maximizes value for all stakeholders, including employees, producers, customers, and service providers.
Despite the unfortunate sequence of events leading to bankruptcy, the Mercon team has diligently worked over several months, taking decisive actions such as recent capitalization and changes in the company’s ownership structure.
Cisa Exportadora, a company with a 70-year history in Nicaragua, was a major subsidiary collecting coffee from over 130 producers and exporting it globally, primarily to the United States.
In response to the cessation of Cisa Exportadora’s operations, the Sandinista dictatorship announced its intervention through a statement, expressing the intention to take over the subsidiary. The regime plans to facilitate the commercialization and exports previously managed by Cisa Exportadora, extending arrangements with countries that have signed cooperation agreements, including China, Russia, and governments in the Middle East. The dictatorship’s letter emphasizes the opening of new international commercial spaces for their quality coffee.