July 27, 2018 / 12:43 PM / 5 months ago

UPDATE 2-Ivory Coast court orders liquidation of cocoa exporter SAF-Cacao

* SAF-Cacao purchases 150-200k tonnes annually

* Company owed regulator over contract defaults (Adds quotes from banker and trader, details)

By Ange Aboa

ABIDJAN, July 27 (Reuters) - A court in Ivory Coast has ordered the liquidation of SAF-Cacao, the top exporter in the world-leading cocoa grower, over debts owed to the Coffee and Cocoa Council (CCC) marketing board, the company’s chief executive told Reuters.

The court order was issued on July 18 and an administrator has already been named to manage the process, Ali Lakiss said by telephone from the company’s headquarters in the second port city of San Pedro.

“We are still fighting to survive,” he said. “We’ve asked the CCC and the prime minister’s office to allow us to execute our 2017/18 contract to pay back our debts. It’s possible to pay it all back if they let us work.”

In addition to its debts to the CCC, SAF-Cacao is one of several exporters with outstanding bank loans.

Reuters reported last month that Ivorian banks were struggling to secure repayment of up to 200 billion CFA francs ($360 million) lent to exporters during the country’s crisis-hit 2016/17 season.

“(SAF-Cacao’s) assets have been seized, including the cocoa warehouses. There’s cocoa there that belongs to the banks, so we are discussing with the CCC and the government to come to an agreement,” said one banker, who asked not to be named.

A European trader said that SAF-Cacao was believed to have around 50,000 tonnes of unsold cocoa in stock.

“It will obviously be seized and might be used to liquidate and pay off some of their debt. But it’s not good cocoa. So the question is what happens to it when it comes into circulation,” he said.

The SAF-Cacao group of companies, which also includes exporter CIPEXI and processor CHOCO-IVOIRE, purchases on average between 150,000 and 200,000 tonnes of cocoa beans each season.

CHOCO-IVOIRE has grinding capacity of around 32,000 tonnes.

The debts to the CCC stem from contract defaults SAF-Cacao incurred on 22,000 tonnes of beans during the 2015/16 season.

A CCC official, who asked not to be named, confirmed the liquidation order but would not give the amount of the debts owed.

Cocoa exporters are among the major borrowers in Ivory Coast, and last season’s wave of defaults has raised concern that the crisis could destabilise the banking sector of French-speaking West Africa’s largest economy.

An International Monetary Fund analysis earlier this year found that lending to the five largest borrowers equated to 98.9 percent of the banking system’s total capital. ($1 = 555.2500 CFA francs) (Reporting by Ange Aboa; additional reporting by Ana Ionova; writing by Joe Bavier; editing by Aaron Ross and Jan Harvey)

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