Latin America’s largest petrochemical company, Braskem, filed an extrajudicial recovery plan with the São Paulo Court on Monday after a 60-day injunction protecting it from creditors expired. The company, which carries $10.9 billion in total debt, reported that 39.6% of listed creditors had agreed to the preliminary terms, below the majority threshold required to bind all creditors.
Braskem’s stock, listed as BRKM5, fell 6.71% on the day, contributing to losses on Brazil’s benchmark Ibovespa index, which closed 0.51% higher. Petrobras, a key shareholder with a 36% stake in Braskem, saw its shares drop more than 2%. The plan outlines potential capitalization of a portion of the debt, contingent on liquidity support from majority shareholders IG4 and Petrobras, and includes commitments to inject capital if performance targets negotiated with creditors are not met.
The preliminary plan covers multiple debt instruments, including $734.8 million in 4.5% notes maturing in 2030, of which 6.7% of the outstanding amount has adhered. Other adhering creditors include Barclays with $213.6 million in a 2021 revolving credit line, $171 million in 2081 maturity notes, $77.8 million in 2041 debt, and $51 million in an export pre-payment line. Non-adhering creditors include BNY Mellon, holding $795.7 million in 2030 debt titles.
Braskem’s U.S. subsidiary, Braskem Idesa, separately filed for Chapter 11 judicial reorganization last week with $2.5 billion in debt, underscoring broader financial pressures across the group. Citi analysts noted in a client report that the filing had been widely anticipated following the expiration of the 60-day protection period, which had shielded the company from creditor actions.
The company must secure support from more than half of its creditors within 90 days to finalize the restructuring plan. Braskem’s extrajudicial process in Brazil runs parallel to its U.S. subsidiary’s proceedings, reflecting a coordinated approach to addressing its debt obligations amid challenging market conditions.
