Owners of Brazil's Braskem finalizing counterproposal to $3 billion capital demand
BAK•Braskem's controlling shareholders are preparing a counterproposal to creditors' demand for a $3 billion capital injection. The company has until late November to secure support from more than half of its creditors for a restructuring plan and avoid bankruptcy.
1. Counterproposal in progress
Braskem's controlling shareholders are finalizing a counterproposal after balking at creditors' demand for a $3 billion capital injection into the petrochemical producer. One source said the requested amount exceeded the company's current valuation and could not be provided in the short time available; a counteroffer is likely within days.
2. Restructuring deadline
A second source said Braskem's restructuring should rely more on operational improvements than fresh equity, though new funding has not been ruled out. Creditors demanded the injection in September, after Braskem filed for a $10.9 billion out-of-court restructuring on August 24. The company has until late November to secure support from more than half of its creditors for a final plan and avoid filing for bankruptcy.
3. Dispute over Mexico unit
Braskem and creditors are also at odds over transfers to Braskem Idesa, its Mexican joint venture with Grupo Idesa. A Brazilian court blocked further transfers in late September, and Braskem appealed; if the ruling is overturned, the unit could exit Chapter 11 by November or earlier, one source said.
