Business · Companies · 2 hrs ago
Braskem and Petrobras representatives head to New York for debt talks
Braskem and Petrobras representatives are in New York for talks with bondholders over Braskem’s debt.
The Brazilian company owes about $11 billion, including roughly $7 billion to bondholders.
The negotiations are aimed at reaching a deal by November 6, giving time to file an out-of-court restructuring plan with a Brazilian court by November 23.
Bondholders’ proposal calls for shareholders to provide $1.85 billion and for another $1.85 billion of debt to become shares.
Petrobras was reported to have agreed to provide $1.2 billion when a deal closes, plus $500 million in 2029 if Braskem meets a debt condition; any agreement still needs the company’s internal approval.
Some bondholders have also sought an involuntary US bankruptcy case for Braskem, based on $272 million in bonds due in 2041.
Braskem has a limited period to respond, and if it does not contest the request, the US Chapter 11 process could begin.
Representatives of Braskem’s controlling shareholder IG4 and Petrobras are heading to New York for talks with the company’s overseas bondholders.
The talks are expected to continue until November 6, a deadline set by bondholders for reaching a commercial agreement.
The discussions may cover Petrobras’s proposed investment in Braskem and a US involuntary Chapter 11 petition filed by some bondholders.
Braskem has about US$11 billion in debt, including approximately US$7 billion held by bondholders.
A recovery plan must be submitted to a Brazilian court by November 23 and requires support from more than half of creditors.
- Who
- Negotiators for IG4, Braskem’s controlling shareholder through the Shine fund, and Petrobras are meeting overseas bondholders.
- What
- They are negotiating a commercial agreement and Braskem’s restructuring.
- When
- The talks are expected to run until November 6, 2026.
- Where
- New York.
- Why
- To reach an agreement and allow a plan for out-of-court restructuring to be formalized.
Braskem bondholders
Petrobras
Proposed new capital
Braskem bondholders
The creditors’ committee proposed a US$1.85 billion shareholder contribution.
Petrobras
Petrobras reportedly accepted a US$1.2 billion contribution at closing and a further US$500 million in 2029, conditional on Braskem’s leverage.
Debt restructuring
Braskem bondholders
The creditors’ proposal includes converting US$1.85 billion of debt into equity.
Petrobras
Petrobras’s position on the proposed debt conversion is not stated.
Negotiating terms
Braskem bondholders
Bondholders set November 6 as a new deadline for reaching a commercial agreement.
Petrobras
A source close to the talks said Petrobras was not inclined to relax its conditions, and any agreement would need internal approval.
Bracebridge Capital funds filed an involuntary Chapter 11 petition involving Braskem America Finance Company.
The committee representing external creditors released a proposal for a US$1.85 billion shareholder contribution and a US$1.85 billion debt-to-equity conversion.
An earlier deadline for reaching a decision on the proposed contribution and other commercial terms expired.
The report was published by Broadcast+.
Bondholders’ new deadline for reaching a commercial agreement is expected to expire.
Braskem’s out-of-court recovery plan must be submitted to a Brazilian court.
- Braskem total debt
- About US$11 billion
- Bondholders’ debt
- Approximately US$7 billion
- Bondholders’ proposal
- US$1.85 billion in new capital and US$1.85 billion of debt converted into equity
- Petrobras contribution reportedly accepted
- US$1.2 billion at closing and US$500 million in 2029, conditional on leverage
- Chapter 11 petition
- Filed October 21 by Bracebridge Capital funds holding US$272 million in bonds due in 2041
- Recovery plan deadline
- November 23
What people are saying
If Chapter 11 is accepted, a case without precedent will open