By Brazil Stock Guide – Braskem S.A. (B3: BRKM3, BRKM5, BRKM6; NYSE: BAK; LATIBEX: XBRK) said on Monday (Sept. 8) that its Mexican subsidiary, Braskem Idesa, has hired Lazard Inc., Cleary Gottlieb Steen & Hamilton LLP and Sainz Abogados to review its capital structure. The move aims to explore financing options to shore up liquidity as macroeconomic pressure and volatile commodity prices weigh on the business.
The announcement follows an Aug. 28 statement in which the company flagged higher feedstock costs and weaker-than-expected demand for petrochemicals. Before that, S&P Global Ratings cut Braskem’s global credit rating to BB- and placed it on CreditWatch negative, citing persistent pressure on petrochemical spreads and the company’s liquidity.
“We are working with advisers to broaden our financing options,” Braskem said in a note.
Braskem Idesa, a joint venture between Braskem and Mexico’s Idesa Group, operates in the Coatzacoalcos petrochemical hub. The unit has been squeezed by rising raw material costs and falling regional polyethylene demand, eroding profitability.
The capital review may include debt renegotiations, investment cuts or new liquidity measures. Creditors and investors will track the process closely, as Braskem seeks to protect its Mexican operations amid global competition and an industry facing oversupply in Asia and contraction in Latin America.
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