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Financial problems at Mercon lead to closure of Cisa Exportadora and other companies in nine countries

After almost 75 years of history, Cisa Exportadora in Nicaragua halted its operations due to the bankruptcy of Mercon.

As coffee producers gear up for the full swing of the 2023-2024 harvest, Cisa Exportadora’s network of collection centers and wet and dry mills abruptly shut their doors without prior notice. The halt in operations stemmed from the financial collapse of the Mercon Coffee Group, a conglomerate of companies which, in recent years, was headquartered in the Netherlands and helmed by its founder, Nicaraguan entrepreneur José Antonio Baltodano.

There are several versions still all unofficial about Mercon´s (and therefor Cisa Exportadora) banckruptcy. One version suggests that some months ago, Baltodano sold most of the company to an American investment fund that decided that Mercon filled for bankrurptcy. Another version is that the acquisition wasn’t an outright sale, but rather, upon acquiring a loan of nearly $500 million from Rabobank, a Dutch financial institution, along with other entities including IFC and Bid Invest, Mercon became part of an investment portfolio.

However, these issues compounded with a multimillion-dollar debt owed by Cisa Exportadora to Lafise Bancentro. This situation might have prompted the bank to intervene Cisa, allowing it to continue its usual activities to fulfill its export contracts and settle the debt.

The reality is that Mercon Coffee Group’s issues forced Cisa Exportadora to suspend the services it provided to thousands of producers, including technical assistance, processing, washing, drying, and exportation of the so-called ‘golden bean.’ This situation has led to various theories, including speculation that fiscal harassment and debts owed to financial entities resulted in an embargo and subsequently led to the closure.

Lea también: Cafetaleros reciben fondo de ayuda de Starbucks a través de Grupo Mercon

Mercon sold because it was bankrupt

However, the issue didn’t arise solely in Nicaragua; it’s a concern across the Group, which operates in nine countries: Nicaragua, Guatemala, Honduras, Panama, Brazil, Vietnam, the Netherlands, the United States, and Spain. In all these locations, Mercon is suspending operations due to the investment fund, which acquired the shares with the commitment to capitalize the company, failing to do so.

According to information released by Mercon on its website, Dulio Baltodano founded Cisa Exportadora in 1950 and was later succeeded by his son, José Antonio Baltodano, who expanded its operations. In the 1980s, José Antonio went on to establish the Mercon Coffee Group, which over time extended its operations to nine countries and established its headquarters in the Netherlands with a subsidiary office in Barcelona, Spain.

Cisa Exportadora was engaged in the purchase, processing, and distribution of coffee, operating commercial offices and agencies across all coffee-growing regions in Nicaragua. During the harvest season, it activated a network of over a hundred purchasing points, facilitating the reception, washing, and transportation of coffee to the mills for subsequent drying and exportation. It also owned the sole mill processing robusta coffee in the country. Throughout the harvest season, typically from October to March, it employed nearly four thousand temporary workers.

Puede leer también: Caen en US$82 millones los ingresos por exportación de la cosecha de café 2022-2023

They don’t know what will happen with Cisa

Annually, Cisa exported approximately half of each harvest, which in recent years hovered around 1.50 million quintals of the so-called ‘golden bean.’ In the last year, there was a record production, and the total export surpassed 3 million quintals. Additionally, the coffee industry is currently experiencing a period of high prices, exceeding $200 per quintal.

“Some information is a bit confusing, but the sale of Mercon was finalized around July. Essentially, this sale was to settle debts. It appears that the company was in difficulties, practically bankrupt, and the owners were left with absolutely nothing,” explained an economist close to the company who requested anonymity due to fear of reprisals.

This implies that the closure of Cisa Exportadora is a consequence of the bankruptcy of Mercon Coffee Group. However, the economist admits that amidst the surprise of the exporter’s closure during peak harvest, it triggered a series of rumors. Among them, speculation that fiscal harassment led to the company’s bankruptcy, a situation deemed unrealistic because if it had occurred, it would have caused difficulties only in Nicaragua, whereas the issue is global.

Mercon pledges to issue a statement

Definitely, everything indicates a global-level bankruptcy of the company and, obviously, a cessation of operations not only in Nicaragua but across all its operations. Remember, Mercon was one of the world’s main coffee traders, and the company that bought that debt likely wanted to secure the global coffee market segment,” explained the economist.

LA PRENSA sought an explanation from officials at Cisa Exportadora, but they did not respond to our calls, messages, or emails. However, individuals close to the company confirmed that they cannot provide any explanation since the operation has been in the hands of the U.S.-based investment fund that acquired it for several months. All they know is that representatives of this fund have committed to issuing a statement in the coming hours or days, explaining what is happening with the Mercon Group.

Moreover, through sources close to the Baltodano family, LA PRENSA learned that they sold over 70 percent of the shares, hence they are now minority shareholders of Mercon and do not have an influence on decision-making. Therefore, they share the same concerns as all individuals involved with the Mercon Group’s companies, as the future of the group remains uncertain.

English café Cisa Exportadora ingles libre archivo

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