Brazil's Braskem files for $10.9 billion out-of-court restructuring (updated)

Petroleo Brasileiro SA Petrobras

24/08/2026 12:37

Petrochemical giant renegotiates around $10.9 billion of unsecured debt
Braskem's shares closed down around 7%, worst performing on Bovespa 
More Brazilian companies are seeking to renegotiate debt while avoiding formal bankruptcy proceedings
Recasts with new Braskem's filing in paragraphs 1, 3, 12; updates share performance in paragraph 5, context in paragraph 8
By Luciana Magalhaes
SAO PAULO, Aug 24 (Reuters) - Brazilian petrochemical company Braskem BRKM3.SA has filed for an out-of-court restructuring to renegotiate around $10.9 billion of unsecured debt, it said in a securities filing on Monday.
Braskem, Latin America's largest petrochemical firm, has struggled with a prolonged downturn in the sector and a disaster linked to its salt mines in northeastern Brazil, both of which severely weakened its cash position.
The firm said it had secured participation of unsecured creditors who represent 39.6% of the subject claims, a percentage sufficient to file the out-of-court restructuring under Brazilian law.
Braskem had already said earlier on Monday that its board of directors had approved the filing once the relevant documentation was finalized.
Braskem's shares BRKM5.SA closed down around 7% after the announcement, making them the worst performers on Brazil's benchmark stock index Bovespa .BVSP, which rose 0.5%.
The out-of-court restructuring, however, did not come as a surprise given Braskem's longstanding debt issues, with Fitch and Moody's having recently downgraded the company's credit ratings.
Reuters reported earlier this month that the petrochemical giant was in advanced talks to file for an out-of-court restructuring in Brazil before the end of August, as a 60-day emergency protection was set to expire.
The move comes as a growing number of Brazilian companies are seeking to renegotiate debt with creditors while avoiding the costs of formal bankruptcy protection proceedings.
"We think the news was already expected, given the end of the injunction that granted the 60-day protection," Citi analysts said in a note to clients.
Braskem Idesa, a joint venture between the Brazilian firm and Mexico's Grupo Idesa, filed last week for Chapter 11 bankruptcy protection in the United States.

POTENTIAL SHARE OFFERING
The out-of-court restructuring proposal is set to be developed within a 90-day period, as Braskem seeks to obtain the minimum percentage required for approval of its updated restructuring plan, it said.
The plan may include a follow-up share offering, three sources familiar with the matter told Reuters on condition of anonymity, potentially paving the way for a capital increase involving external investors.
Control of Braskem is shared by private equity firm IG4 Capital, which recently acquired a stake from engineering group Novonor, and state-run oil company Petrobras PETR3.SA.
UBS BB analysts said that a final resolution to the company's restructuring process may take time, but the absence of an immediate capital injection reduces the risk of shareholder dilution for now.
Braskem said the out-of-court proceeding was limited to the restructuring of its financial liabilities and would not affect obligations to suppliers, customers or other stakeholders.

 (Reporting by Luciana Magalhaes; Additional reporting by Isabel Teles, Paula Arend Laier and Andre Romani; Writing by Gabriel Araujo and Fernando Cardoso; Editing by Paul Simao and Aurora Ellis)
 ((fernando.cardoso@thomsonreuters.com))