Braskem may seek out-of-court restructuring this month, sources say

• Creditors rejected Braskem's initial offer of a five-year grace period for principal repayment and 2-1/2-year grace period for interest payments
• The proposed out-of-court framework would include a 90-day stay period to negotiate a comprehensive plan while protecting the company from creditor claims
• Braskem is expected to need three to five years to resolve its financial issues, compounded by depressed petrochemical prices and cash problems from a sinkhole incident in northeastern Brazil

Braskem Pursues Out-of-Court Debt Restructuring Amid $10 Billion Liability

Braskem, Latin America's largest petrochemical company, is in advanced negotiations for an out-of-court restructuring that could be filed as early as August 2026, according to sources familiar with the matter. The company is struggling with over $10 billion in debt across its operations in Brazil, Europe, and the United States.

Key Timeline and Details:

• Restructuring proposal expected before August 24, when Braskem's 60-day emergency protection expires
• If approved, the framework would include a 90-day stay period to negotiate a comprehensive plan while protecting the company from creditor claims
• Resolution of Braskem's financial issues expected to take three to five years

Background:

Braskem was recently acquired by private equity firm IG4 Capital from engineering group Novonor. The company faces multiple headwinds, including a prolonged downcycle in the petrochemical sector with depressed prices and a severely weakened cash position due to unspecified issues in northeastern Brazil.

Creditor Negotiations:

Discussions with creditors, including bondholders and banks, remain ongoing but no deal has been reached. Creditors have rejected Braskem's initial proposal, which offered principal repayment after a five-year grace period and a 2.5-year grace period for interest payments.

Market Implications:

The restructuring highlights ongoing distress in the global petrochemical sector and represents a significant credit event for Latin American corporate debt markets. The outcome will be closely watched by investors exposed to emerging market petrochemical assets and distressed debt opportunities. Braskem declined to comment on the negotiations.