Braskem’s $11 Billion Debt Unresolved as Restructuring Proposals Emerge
Key Facts
Braskem and its creditors have not agreed on terms to restructure about $11 billion in debt, despite proposals involving new capital and converting part of the debt into equity, according to a report published by Investing.com citing Bloomberg on October 25. The report said, "Major disagreements remain, and an agreement is not guaranteed." The negotiations therefore face two paths that have yet to converge enough to produce a joint proposal, while the company has announced no final agreement. The talks are part of an out-of-court restructuring process, not a completed plan. The absence of an agreement leaves the proposed financial terms unresolved as negotiations between the company and creditors continue.
The proposals center on a mix of new capital and converting claims into equity, but the initial amounts differ between the parties. The report estimated the total initial capital and debt conversion in the creditors’ proposal at about $4 billion, compared with about $5 billion in Braskem’s proposal. According to the report, the company’s plan includes converting $2.8 billion of debt into equity, with shareholders and third parties contributing $1.2 billion to a planned $2.25 billion share offering. Creditors are seeking an immediate guarantee worth $1.85 billion from the main shareholders or approved parties. Their proposal also includes immediately converting $1.85 billion of debt into equity, with a possible additional $450 million conversion in June 2029. The differences show that negotiations cover the amount of financing, its source of backing and the timing of debt conversions, rather than a single overall figure.
Braskem began the restructuring process to address unsecured financial claims, defining its scope as "purely financial" and explaining that it does not cover its obligations to suppliers, customers and other stakeholders. This distinction defines the announced scope of the process: it addresses covered financial claims, while operational obligations to suppliers and customers remain outside it. The company said signatories to the plan represented 39.6% of covered claims when it was filed, and that an updated plan would be presented within 90 days of the filing date. The court also approved a 120-day stay on enforcement actions against the covered entities, while the company and some subsidiaries had to demonstrate that they had reached the quorum required to confirm the plan within 90 days of the court’s decision. These deadlines set the procedural framework for the negotiations but do not mean that restructuring terms have been settled.
The negotiating criteria Braskem disclosed include extending obligations and maturities, capitalizing interest for an unspecified period, and potentially providing liquidity support and converting part of the claims into equity. The company had said, "No decision has been made on the final restructuring terms" at the time of its disclosure. This round follows an attempt that failed to win the acceptance of some creditors: Bloomberg Law reported that they held back from a proposal by the company and shareholders ahead of the October 9 deadline, saying its terms were insufficient to reach an agreement. The report said shareholders had pledged about $1 billion in new capital to support a later share issuance, conditional on a substantial debt reduction through the restructuring. This shows that new financing was also part of earlier discussions, without resolving the disagreement over terms.
The negotiations came as Braskem reported improvement in some second-quarter 2026 results, while its debt burden remained high. The company posted consolidated earnings before interest, taxes, depreciation and amortization of $1.043 billion, driven mainly by wider chemical and petrochemical margins in international markets and trading gains. Net income reached $664 million, up from a lower level in the first quarter; the company attributed the increase mainly to higher gross profit as margins widened. But total debt stood at $10.4 billion on June 30, while adjusted net debt reached $9.5 billion, up 3% from the previous quarter. Leverage was 6.74 times for the quarter, putting strong operating results alongside continued financial pressure.
Braskem’s stock, listed under the ticker BAK, closed at $1.70 on October 23, according to EL7 data. The report citing Bloomberg set November 22, 2026, as the deadline for reaching an agreement, with a deal potentially coming sooner. The deadline follows differences between the proposals over financing and conversions, as well as creditors’ reluctance to accept an earlier proposal ahead of the October deadline. Until then, the final restructuring terms remain unsettled, according to the company’s disclosure. The next step depends on the parties’ ability to agree on the plan’s terms before the stated deadline.