Shares of Braskem (BRKM5) declined 2.6% to R$ 4.94 on Monday as the Brazilian petrochemical company formally initiated an extrajudicial reorganization process following the expiration of a court-ordered protective injunction.
The filing with the São Paulo Court of Justice was prompted by the lapse of a preliminary measure that had shielded Braskem from creditor enforcement actions since June. Without this protection, management moved to formalize the restructuring to avoid a full judicial reorganization, according to the company’s disclosure.
Braskem’s debt restructuring initiative encompasses approximately $10.9 billion in obligations across its operations in Brazil, the United States, and Europe. The company secured a 90-day grace period under the extrajudicial framework to negotiate terms with creditors, though any final agreement will require approval from more than 50% of affected creditors to take effect.
The announcement follows last week’s Chapter 11 bankruptcy filing by Braskem Idesa, its Mexican joint venture with Grupo Idesa, which had already weighed on investor sentiment. Braskem’s shares are now trading near their 52-week low of R$ 4.70, down sharply from a 52-week high of R$ 13.78.
The broader market environment added pressure, with Brazil’s benchmark Ibovespa down 0.5% in early trading and U.S. indices declining as the S&P 500 fell 0.4% and the Nasdaq dropped 0.9%. The company’s board also indicated that a potential share offering could be part of the restructuring plan, raising dilution risks for existing shareholders.
