Justice requires Braskem to comply with four measures during the extrajudicial recovery process.

Braskem announced on Friday (25) that it received notification of a ruling from the 2nd Court of Deaths and Judicial Recovery of the Central Cible Forum of São Paulo regarding the extrajudicial recovery process of petrochemicals and five subsidiaries.

The company has not received a formal subpoena related to the decision yet, as it is still pending official publication by the judiciary. Braskem is assessing the implications of the decision and planning its next actions.

The Court’s decision includes four relevant measures regarding the case.

The court ruled that every subsidiary must independently secure the approval of creditors holding at least one third of their debts in the out-of-court recovery process. Two subsidiaries failed to meet this requirement and consequently lost their temporary immunity from legal actions.

The ruling also halted any new payments related to the reorganization of Braskem Idesa’s Mexican operation and designated a legal manager to review debts and agreements under the strategy.

Braskem is facing a crisis.

Braskem, a major petrochemical company in Latin America, specializes in manufacturing plastic resins and sustainable chemicals. It is currently undergoing a debt restructuring of approximately $11 billion.

The company is attempting to negotiate an out-of-court settlement with creditors that involves Petrobras and IG4 Capital, the controlling shareholders, contributing $3 billion to prevent the need for judicial recovery.

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• Petrobras is considering not increasing its stake in Braskem as it negotiates its debt.

Petrobras President Magda Chambriard stated that the government has no plans to raise its stake in Braskem unless other shareholders also increase their holdings.

Different companies

Extrajudicial recovery will still occur during procedural consolidation rather than substantial consolidation. This implies that the six companies will remain distinct entities throughout the process, each maintaining their own assets, creditors, and calculations for plan approval.

The decision stops the company’s debts and assets from being seen as owned by one company.

In the case of extrajudicial recovery, each company must fulfill legal requirements independently and obtain the necessary approval from creditors according to the court.

The figures shown during the procedure were 39.6% for Braskem, 20.4% for Braskem Netherlands, 42.4% for Braskem Trading & Shipping, 50.6% for Braskem Netherlands Finance, and 13.2% for Braskem America Finance Company.

Two affiliated companies no longer have security.

The decision also revoked the collection suspension period, which temporarily halts enforcement actions and other individual creditor measures, for two companies: Braskem Netherlands B.V. and Braskem America Finance Company.

According to Justice, they did not meet the minimum requirement of one-third of creditors needed to stay under this protection.

Companies must demonstrate the validity of their membership within a 15-day period or specify the necessary actions to be taken.

Justice halts additional payments.

Operation BAKIDE (from Braskem Idesa) is another aspect of the decision, connected to a restructuring carried out in the United States using the Chapter 11 process, which is akin to judicial recovery under American law.

The financial obligations for the operation total around $800 million, with components such as DIP funding of US$ 415 million, $71 million in cash support upon completion of the process, and a potential future responsibility linked to the option to sell participation in Braskem Idesa.

The court decided to halt the implementation of BAKIDE due to the large number of commitments and insufficient information on economic returns to Brazilian companies, as stated by Justice.

The ruling currently bans any new financial transactions, payments, or asset transfers at Braskem Idesa until a court makes a further decision.

Justice also ordered Braskem to submit a comprehensive report on the operation within 15 days, covering contracts, actions, corporate decisions, financial evaluations, revenue forecasts, and financing details, as well as the effects of BAKIDE on out-of-court recovery in Brazil.

Petrobras and Shine I Investment Fund in Multistrategy Participations were also asked to provide explanations about corporate and contractual approvals linked to the transaction.

Judicial administrator is appointed by Justice.

The fourth step involves appointing ACFB Judicial Administration Ltda. as the judicial administrator of the procedure, with lawyer Antonia Viviana Santos de Oliveira Cavalcante serving as the designated technical officer.

The appointment is an unusual action in out-of-court debt recovery procedures, as stated in the ruling, and was deemed necessary due to the intricate nature of the case, which includes six companies, five of which are foreign, varied financing setups, and a disagreement over the method of calculating the approval quorum.

The overall passive amount involved in the process is R$ 187.07 billion, with R$ 56.48 billion attributed to financial credits that can be recovered and R$ 130.60 billion related to debts within the company group.

The administrator’s responsibilities include verifying financial credits, auditing individual membership fees for the six-company plan, and evaluating intercompany operations and their associated assets.

The ruling was authorized on September 24, 2026 by Judge Tainá Maria Leonardo de Oliveira from the 2nd Court of Deaths and Judicial Recovery at the Cible Central Forum of São Paulo. Braskem mentioned they had not received a formal summons yet and were waiting for the decision to be officially published.