EM LATAM CREDIT: Braskem: Restructuring? - Negative
(BRASKM; Ba3/BBneg/BB)
"The tough dispute between Rothschild and Houlihan Lokey for the Braskem mandate" - Veja Negocios
Brazil weekly news magazine Veja, owned by media conglomerate Grupo Abril, reported that top restructuring advisors were competing to negotiate a debt restructuring with creditor banks with a decision expected June 16th.
BRASKM bonds were lower again today with 2034s quoted down 87c to USD82.68 which is about 4 points lower in the past couple of days, 7 points since May month end and 13 points lower QTD.
To put this in context, Braskem has been struggling for years with continued provisioning for the Algoas environmental disaster as well as operational problems.
The company reported high net debt leverage of 7.92x as of 1Q 2025. Braskem said they had USD2bn in cash to pay for up to 33 months of debt maturities plus they had a USD1bn revolving credit line with banks.
A group of top Brazil banks hold Braskem stock (50.1% of the total outstanding) as collateral for defaulted Odebrecht (aka Novenor) loans and have waited for years to liquidate always hoping for a higher stock price and winding up with just the opposite.
Petrobras owns 47% of Braskem common stock. Their CEO Magda Chambriard has recently been very public and vocal about wanting new management as well as a larger role in decision making.
Meanwhile, businessman Nelson Tanure who is known for getting involved in repairing and restructuring companies has been negotiating with the banks to buy some or most of their stake but not a controlling interest.
This has led to some local media reports of a potential debt restructuring which has triggered a sell off in the bonds. We posted about this numerous times in the past days if you would like to discuss the issue further. Here is the link to the previous post yesterday for more information: https://mni.marketnews.com/400kaia
Leia mais em: https://veja.abril.com.br/coluna/radar-economico/a-dura-disputa-do-rothschild-e-da-houlihan-lokey-pelo-mandato-da-braskem/
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