Creditors Mobilize as Braskem Hires Advisers for Capital Review

Overview

• Braskem said it hired financial and legal advisers to map economic-financial alternatives to optimize its capital structure, citing a prolonged petrochemical downcycle.
• Shares fell as much as 14% to R$7.07 intraday, the lowest since March 2015, and the 2031 dollar bond slid to about 47 cents on the dollar.
• Debt holders contacted Moelis & Co. and Houlihan Lokey to prepare for possible negotiations, according to people familiar with the matter, with no formal mandates yet.
• S&P last week cut Braskem’s credit rating to B+ with a negative outlook as reported leverage rose to 10.59x at midyear.
• The company reported about US$8.5 billion in gross debt, cash near US$1.7 billion excluding Mexico, and a US$1 billion revolver through December 2026, while UBS BB downgraded the stock to neutral and cut its target to R$10.