Braskem, the Brazilian petrochemical giant, has reportedly secured an agreement for an out-of-court debt restructuring amounting to $11 billion. This development comes as the company faced an August 24 deadline to resolve its debt woes and avoid filing for bankruptcy protection. The agreement, if confirmed, would provide much-needed financial stability for Braskem, which has been grappling with a deteriorating financial situation and mounting debts.
The restructuring efforts have been intense, with Braskem engaging in negotiations with a diverse group of creditors. Earlier reports indicated that the company was seeking support from creditors representing at least one-third of its financial debt to secure a 90-day extension for negotiations through an out-of-court restructuring. This strategic move aimed to prevent a court-supervised reorganization, which creditors also preferred to avoid.
Petrobras, a major shareholder and supplier of naphtha to Braskem, has been a key player in these discussions. Petrobras had previously tightened credit terms on naphtha supplies, reducing its share to Braskem from 70% to about 30%, which forced Braskem to seek other suppliers and more bank credit. There were considerations by Petrobras to improve payment terms to Braskem, potentially easing the financial strain. Creditors had also pressed Petrobras for a firmer financial commitment, including a capital injection, although a shareholder capital increase was initially ruled out. The reported $11 billion deal suggests a comprehensive resolution to these complex negotiations.
