Brazil's Braskem creditors, shareholders reportedly target Wednesday deadline for debt deal
BAK•Braskem creditors and shareholders are reportedly aiming to reach an out-of-court restructuring deal by Wednesday, ahead of a November 22 court deadline covering nearly $11 billion in debt. The parties are working toward a capitalization agreement of around $4 billion, about $1 billion below an earlier proposal.
1. Talks target Wednesday
Braskem's shareholders and creditors are aiming to conclude out-of-court restructuring talks by Wednesday. The target is not legally binding and could be revised; the company faces a November 22 court deadline to present an approved plan for nearly $11 billion in debt or face formal judicial recovery.
2. Capitalization proposal
The planned recapitalization includes a shareholder cash injection and a creditor debt-to-equity conversion. One person close to the talks said the group is working toward a total capitalization agreement of around $4 billion, roughly $1 billion less than previously discussed. Bondholders rejected a $3.8 billion conversion after Petrobras lowered its planned cash injection from $1.7 billion to $1.4 billion.
3. Earlier restructuring
An attempt to reach an agreement with bondholders in New York failed last week over the scale of the deal. Braskem filed for an out-of-court restructuring in late August; the filing did not affect obligations to suppliers or customers. The company has faced cash pressure after an environmental disaster at a salt mine and a prolonged downturn in global petrochemical prices.
