Braskem, the largest thermoplastic resin producer in the Americas, is racing to avoid bankruptcy protection as it navigates a severe financial crisis. The company, now controlled by IG4 and Petrobras, has initiated negotiations with creditors in both Brazil and Mexico to restructure approximately $12 billion in consolidated debt, which includes liabilities from its Mexican subsidiary Braskem Idesa.
Braskem is preparing an extrajudicial restructuring petition to address upcoming debt maturities, including nearly $150 million in international coupon bond payments due in July. Additional maturities for July include $300 million in letters of credit and $90 million in domestic bonds. To facilitate negotiations, Braskem is seeking a 90-day standstill agreement from creditors, similar to a US prepackaged Chapter 11 proceeding. This would provide time to negotiate a comprehensive debt restructuring plan, and the company aims to enter the process with broad terms already agreed upon by bondholder and bank groups. The company intends to avoid debt-for-equity swaps and capital injections from Petrobras.
Helcio Tokeshi, the new CEO and managing partner at IG4 Capital, acknowledged the urgency of the situation. While expressing optimism due to stronger petrochemical prices, he stressed the need to persuade creditors to agree to a standstill on debt maturities. The company's goal is to restructure its debt to bring its net debt-to-EBITDA ratio down to 2.5 times, from 16.8 times in March. Failure to secure an out-of-court agreement could force Braskem to seek formal court protection, though stakeholders are aiming to avoid outright bankruptcy.
