Braskem Moves Forward with Debt Restructuring Plan Amid Leadership Changes

Brazilian petrochemical giant Braskem is preparing to present a comprehensive debt restructuring plan to its creditors by July, aiming to extend debt maturities, reduce interest payments, and increase grace periods. The company has ruled out any capital injections or debt-to-equity conversions as part of this strategy. This move seeks creditors' support for an extrajudicial restructuring process before Braskem's debt payments come due in July, potentially allowing a 90-day suspension of financial obligations. Braskem plans to first secure backing from at least one-third of its debt holders to initiate this process and then to garner approval from creditors representing a majority of the total debt to finalize the restructuring plan.

The company is also focused on maintaining control of its Mexican subsidiary, Braskem Idesa, which is currently renegotiating contracts with Pemex following missed debt payments. This comes alongside significant corporate shifts as IG4 Capital, which now co-controls Braskem shares along with Petrobras after Novonor’s share transfer, prepares to appoint Helcio Tokeshi as the new CEO and Carlos Brandão as the new financial director. Nir Lander will continue in his leadership role amid these changes.

Following the announcement, Braskem's shares dropped 5.79% to R$9.43 but have still seen an 18.7% increase so far this year, reflecting investor caution amid restructuring efforts but also underlying confidence in the company's direction.

This extensive restructuring effort underscores Braskem’s proactive approach to manage its liabilities and stabilize operations while navigating complex negotiations with creditors and subsidiaries. The company’s strategy aims to secure financial sustainability without diluting existing equity or seeking new capital injections, highlighting a preference for extrajudicial solutions to its financial challenges.