Business · Companies · 10 hrs ago
Braskem creditors and shareholders aim for debt deal by Wednesday
Braskem’s shareholders and creditors aim to agree on a debt restructuring by Wednesday.
The Brazilian petrochemical company must submit an approved plan for nearly $11 billion in debt by November 22 or face formal court-supervised bankruptcy protection.
The proposed deal would raise about $4 billion in total capital, roughly $1 billion less than previously discussed.
It would combine new money from shareholders with creditors exchanging some debt for shares.
Talks have been difficult: bondholders rejected a proposed $3.8 billion debt-to-equity conversion after Petrobras cut its planned cash contribution from $1.7 billion to $1.4 billion.
Braskem has faced years of cash pressure following a salt-mine environmental disaster and a prolonged slump in global petrochemical prices.
If the court deadline is missed, formal judicial recovery follows, though the Wednesday target is flexible and could change.
Braskem shareholders and creditors are aiming to conclude out-of-court restructuring talks by Wednesday, November 11.
The company must present an approved plan for nearly $11 billion in debt by November 22 to avoid formal judicial recovery.
The proposed recapitalization includes a shareholder cash injection and creditors converting debt into equity.
People close to the talks said the parties are working toward a total capitalization agreement of about $4 billion.
Bondholders rejected a proposed $3.8 billion debt-to-equity conversion after Petrobras reduced its planned cash injection.
- Who
- Braskem shareholders and creditors, including bondholders, are negotiating. Petrobras and IG4 are the company’s co-controllers.
- What
- They aim to conclude an out-of-court restructuring deal for nearly $11 billion in debt.
- When
- The target is Wednesday, November 11. Braskem faces a court deadline of November 22 to present an approved plan.
- Where
- Brazil; a previous attempt to reach an agreement with bondholders took place in New York.
- Why
- Braskem needs an approved restructuring plan to avoid formal judicial recovery, which the parties want to avoid.
Shareholders
Bondholders
Debt-to-equity conversion
Shareholders
Petrobras lowered its planned cash injection from $1.7 billion to $1.4 billion.
Bondholders
Bondholders rejected a proposed $3.8 billion debt-to-equity conversion after the reduction.
Scale of the deal
Shareholders
Shareholders and bondholders disagreed on the scale of the restructuring.
Bondholders
Shareholders and bondholders disagreed on the scale of the restructuring.
Braskem filed for an out-of-court restructuring involving close to $11 billion in debt.
An attempt to reach an agreement with bondholders in New York failed after the sides disagreed on the scale of the deal.
Two people close to the negotiations said shareholders and creditors were targeting Wednesday to conclude restructuring talks.
The parties’ flexible target date for reaching a deal.
Braskem’s court deadline to present an approved restructuring plan.
- Debt covered
- Close to $11 billion
- Target deal date
- Wednesday, November 11
- Court deadline
- November 22
- Target capitalization
- About $4 billion
- Proposed conversion rejected by bondholders
- $3.8 billion
- Petrobras planned cash injection
- Reduced from $1.7 billion to $1.4 billion
2 sources
What people are saying
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