The group’s US subsidiary, called Transmar Commodity, expanded rapidly during the past few years to create a global supply chain for cocoa and cocoa products, according to the court filing.
Transmar Commodity intends to operate its business throughout the proceedings, said the company’s chief restructuring officer, Robert Frezza.
Despite the quick global expansion, Frezza explained that Transmar Commodity and its affiliates “faced obstacles and difficulties in expanding their infrastructure and corporate governance to integrate its activities into a single network.”
Overreliance on indebted Euromar
In addition, over the past two years, Transmar Commodity and its affiliates, including the group’s other subsidiary Euromar, encountered difficulties in properly hedging their purchasing commitments for cocoa and cocoa products due to the volatility of pricing within the cocoa market and the inherent risks associated with hedging and trading, Frezza said.
Given the fact that cocoa materials are traditionally traded in pound sterling, Brexit - which later caused currency fluctuations - had “significant negative impact on the liquidity of Euromar,” he added.
As Euromar entered liquidity crisis in August, 2016, its newly-appointed co-managing director, Josef Schultheis, demanded Transmar Commodity provided increased financial support, according to the court filing.
“Euromar’s insolvency has also substantially added to the debtor’s (Transmar Commodity) own financial distress,” Frezza said.
Transmar Commodity is currently "a very large" creditor of Euromar, having net claims against Euromar for at least $94m, Frezza pointed out.
Transmar has over 350 commercial customers around the world, and supplies all major US and European chocolate producers, including Hershey, Mars, Nestlé and Barry Callebaut.