Overview

• Braskem informed investors in a CVM filing that it retained financial and legal advisers to map economic-financial alternatives to optimize its capital structure, without naming the firms or possible measures.
• Press reports cited Lazard and the law firms E. Munhoz and Cleary Gottlieb as the advisers, a detail not confirmed by the company.
• The stock fell about 14% around 1 p.m. to R$7.07 at the day’s low, the weakest intraday level since March 2015 and among the steepest losses on the Ibovespa.
• UBS BB cut its rating to neutral and lowered the price target to R$10, pointing to squeezed petrochemical margins and policy conditions it views as necessary to stem cash burn.
• The company recently initiated a similar capital and liquidity review at its Mexican unit Braskem Idesa, and it ended June with leverage of 10.59x, gross debt near US$8.5 billion and substantial maturities only after 2030.