Braskem is set to strike a deal with its creditors, according to a Petrobras executive.
A Petrobras board member working with Braskem mentioned the possibility of Brazilian petrochemicals negotiating with creditors to reorganize approximately $11 billion in debts and preventing a need for court-supervised recovery.
No definitive action has been decided regarding potential state funding for Braskem, stated William France, Petrobras’ Director of Industrial Processes, during a conference in Rio de Janeiro.
“We cannot rule out anything in this country,” he mentioned when asked about the potential of seeking judicial recovery. “However, Petrobras, as a shareholder, is involved in the extrajudicial restructuring process with the aim of reaching an agreement with creditors.”
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The aim is to establish a strong company within five to six years, transitioning from being the sixth largest petrochemical producer in the world to the fifth or fourth position.
The petrochemical company is looking to reorganize its debt following financial challenges caused by an environmental catastrophe and a prolonged downturn in the industry. It initiated an out-of-court restructuring process in August.
Negotiations have centered on identifying investors willing to inject new funds, as debt holders are requesting Petrobras and IG4 Capital, the major shareholders, commit to raising $3 billion.
Petrobras has been more active in the discussions and aims to prevent a request for court-supervised restructuring, but has hesitated to agree to the mandatory financial backing demanded by creditors, as per sources familiar with the matter.
