Proposals to restructure Braskem’s $11 billion debt run into financing disputes
Key Facts
Braskem and its creditors are negotiating a restructuring of about $11 billion in debt, a process that could spare the company from seeking bankruptcy protection, according to a report published by Investing.com, citing Bloomberg, on October 25, 2026. But progress in the talks has not secured an agreement, with significant differences still unresolved, the report said. Negotiations center on how much new financing would be injected, how much debt would be converted into equity and which parties would guarantee the funds. The report said both sides are working to narrow the gap between their proposals, while an agreement remains uncertain. Braskem confirmed that negotiations are continuing but provided no further details.
The proposals differ in the amount of capital and initial conversions, which total about $4 billion under the creditors’ proposal, compared with about $5 billion under Braskem’s plan, the report said. The creditor group supports a planned $2.25 billion share offering but wants $1.85 billion guaranteed upfront by major shareholders or approved third parties. The company’s side, by contrast, proposes converting $2.8 billion of debt into equity, with shareholders and third parties contributing $1.2 billion to the offering. The terms show that the dispute is not limited to the total financing amount but also concerns who bears the risk of securing it before the deal is completed. No final terms have been announced.
The creditors’ proposal includes an immediate conversion of $1.85 billion of debt into equity, with the possibility of converting an additional $450 million in June 2029. Braskem’s proposal, if needed, allows for additional contributions that month of up to $500 million from shareholders and $1.5 billion from creditors through capital injections and debt conversions. The disagreement thus extends to the timing of financing and conversions, not just their initial amount. Creditors said they want most of the offering’s financing guaranteed upfront, while the company’s plan places potential additional contributions at a later stage. Converting debt into equity changes ownership stakes, but the negotiations have not settled the details.
Braskem’s plan would allow Petrobras and IG4 Capital to retain control and manage the company, according to the report. IG4 declined to comment, while Petrobras did not immediately respond to requests for comment, the report said. The provision adds a question of control to negotiations over financing and debt reduction, as the company has not announced further details about its position on the proposals. Braskem said negotiations are continuing without confirming agreement on any particular structure or terms. The report concluded that "significant differences remain, and an agreement is not guaranteed."
The restructuring process dates back to August 2026, when Braskem began out-of-court negotiations to address its debt burden. On August 24, the company filed for an out-of-court restructuring covering about $10.9 billion in unsecured financial obligations, according to its disclosure to the U.S. Securities and Exchange Commission. Creditors that signed the filing then represented 39.6% of the covered claims, and the company was given 90 days to obtain the required percentage for approval of an updated plan. The announced framework includes extending obligations and their maturities and capitalizing interest for a period still to be determined, alongside potential liquidity support and the possibility of converting part of the claims into equity. Braskem said in the second quarter that proposals it had received from creditor groups were preliminary and nonbinding, and that it was committed to continuing discussions.
The negotiations had previously stalled after creditors sought a $3 billion capital injection from Petrobras and IG4, a demand shareholders rejected, the report said. On October 7, Bloomberg reported that creditors had rejected an earlier proposal from the company and shareholders after shareholders pledged about $1 billion in new financing to support a later issuance, according to Bloomberg Law. The current round of proposals follows that impasse, with discussions turning to specific guarantees for the offering and debt-to-equity conversions. In its second-quarter 2026 results, Braskem reported EBITDA of $1.043 billion and net income of $664 million. But it recorded total debt of $10.4 billion and adjusted net debt of $9.5 billion as of June 30, with leverage of 6.74 times; adjusted net debt rose 3% from the previous quarter.
BAK shares closed at $1.7 on October 23, 2026, according to EL7 data. The two sides have until November 22 to reach an agreement, according to Bloomberg sources cited in the report, though they could reach one earlier. The deadline sets a timeframe for the ongoing negotiations, while financing, conversions and guarantees remain disputed. Braskem has not announced further details about the talks or a final restructuring plan. The outcome of the negotiations depends on the two sides’ ability to agree on terms before the deadline.