Ivory Coast Cocoa Regulator Says Saf Yet to Submit Debt Plan

(Bloomberg) -- Ivory Coast’s cocoa regulator said indebted cocoa exporter Saf-Cacao and its lenders have not proposed repayment plans for the company, which is now undergoing liquidation, according to a memo sent this week by the regulator to the government.

Le Conseil du Cafe-Cacao had “no choice” but to seek the judicial recovery of 75.6 billion CFA francs ($133 million) owed by the Saf group, the regulator said in the document sent to Bloomberg by the Ivory Coast government’s communications department.

The CCC was granted an order for the liquidation of Saf-Cacao, one of the country’s biggest cocoa exporters, by a San Pedro court on July 18. Banks in the country, which are owed an estimated 150 billion CFA francs by the company, have argued for it to be allowed to continue trading so they too can be repaid, people familiar with the matter said last month. At the time, they estimated the amount owed to the CCC at 7 billion CFA francs.

However, in several meetings with the local banking association and the company, “the Saf group did not propose any debt repayment plan and the banks have made no concrete proposal to end the crisis,” the CCC said.

The regulator said it had noted the non-performance of contracts backed by 150,000 metric tons for the 2017-18 season. The group also had an agreement for the deferred payment of taxes and royalties backed by its physical inventory of 60,000 tons for the 2015-16 and 2016-17 seasons, which it failed to comply with.

“In order to limit the huge losses caused by these defects, Le Conseil du Cafe-Cacao has resold the contracts of the 2017-2018 campaign to maintain the balance of the system in a context of a drastic drop in cocoa prices,” it said.

Representatives from the regulator, Saf and the banking group could not be reached for comment on Tuesday, which was a public holiday in Ivory Coast.

Ivory Coast is the world’s biggest cocoa producer and farmers sent 5,847 tons of cocoa to ports in the week through Aug. 19 compared with an estimated 10,000 tons a year earlier, according to a person familiar with government data. A KPMG audit of the industry earlier this year showed Saf-Cacao was among 32 exporters that defaulted on 222,302 tons of cocoa last season.

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