By Brazil Stock Guide – Braskem’s board has approved the filing of an out-of-court restructuring covering about $10.9 billion, or roughly 56.1 billion reais, in unsecured financial debt, the Brazilian petrochemical producer said on Monday.
The company said it will formally file the request once the necessary documents are completed, seeking what it described as a stable and protected legal framework to negotiate and implement a restructuring of its financial obligations.
Braskem’s main financial creditors include bondholders and Brazilian lenders Banco do Brasil, state development bank BNDES, Itaú Unibanco, Bradesco and Santander. The restructuring comes after weeks of negotiations between the company, creditors and its controlling shareholders, IG4 Capital and Petrobras.
The proceeding will have a limited and strictly financial scope, Braskem said. Trade obligations to suppliers, customers and other stakeholders will not be included and will continue to be honored under their existing contracts.
The move comes as a 60-day court protection obtained by Braskem in June expires on Monday. The temporary measure had shielded the company from certain enforcement actions while it negotiated with creditors over a broader solution for its heavily leveraged balance sheet.
A key issue in the negotiations is whether extending debt maturities will be enough to restore Braskem’s capital structure or whether the company will require fresh money from shareholders. Creditors have also discussed additional collateral and possible debt-to-equity conversions as part of a potential restructuring.
Those discussions could put Petrobras and IG4 at the center of the next phase of negotiations, particularly if creditors demand new equity as part of a final agreement. The two shareholders have so far not announced any commitment to inject fresh capital into Braskem.
Braskem said it will publish the restructuring documents on its investor-relations website and through Brazilian securities regulator CVM and exchange operator B3 once they become available. Brazil Stock Guide will update this story when the court filing and further details of the restructuring plan are released.
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