Braskem SA and its new controlling shareholder, IG4 Capital, are facing difficulties in securing enough backing from creditors to proceed with their proposed out-of-court restructuring. Disagreements among creditors regarding uneven treatment and collaterals are hindering the process, making it challenging to reach the legal threshold required for an extrajudicial recovery, which the company aimed to achieve by July.
Failure to secure this agreement raises the probability of the Brazilian petrochemical giant needing to seek emergency court protection against creditors. The company's bonds have already experienced a decline, falling to 43 cents on the dollar, reflecting growing concerns about its financial stability. Braskem reported a loss of 10.3 billion reais in the fourth quarter, doubling its losses from the previous year and raising "material uncertainty" about its ability to continue as a going concern.
Braskem is due to repay $1.5 billion in debt this year, despite holding $2.1 billion in cash as of December. Meanwhile, IG4 Capital is awaiting European regulatory approval for its acquisition of a controlling stake from Novonor SA, with a decision expected as late as May. Additionally, Braskem's Mexican subsidiary, Braskem Idesa, is reportedly in discussions with creditors for financing to support a potential Chapter 11 filing in the U.S.
