Braskem negotiation rerun: executive summary
Cutoff: 17 August 2026. Four stakeholder positions were formed independently from an updated common brief. A neutral mediator then conducted two concession rounds and stress-tested the result. The raw mediator output is preserved separately. The published view below includes a review adjustment described in the publication note.
Most likely clearing package
| Term | Published base case |
|---|---|
| Process | Protected 90-day plan-to-a-plan EJ with at least one-third initial support and hard milestones |
| Maturity | Five-year extension of standby and near/intermediate debt; long bonds preserved |
| Interest relief | 4% cash plus residual contractual coupon PIK for 24 months |
| Post-relief coupon | Existing weighted coupon plus 150bp |
| Petrobras | US$500M firm revolving naphtha credit plus up to US$250M of conditional capacity; approximately 180-day invoices and commercial pricing |
| LC capacity | Roll US$572M of Q3 LC runoff plus US$300M of incremental LC/RCF capacity |
| IG4/Shine | US$300M funded deeply subordinated capital plus US$50M rights backstop |
| Creditor warrants | 15% fully diluted at closing, stepping to 22.5% on objective misses |
| Creditor-favorable case | 17.5% at closing, stepping to 25%, if sponsor support or cash conversion disappoints |
| Initial principal haircut | None |
| Liquidity floors | US$750M at interim closing and US$1.0B at definitive closing |
| Collateral | First liens limited to assets financed by Petrobras and genuine new money; limited legacy second lien; no blanket lien on Brazilian crackers |
| Mexico | Ring-fenced with no new parent guarantee |
| Alagoas | Safety, compensation and remediation obligations unimpaired and excluded from collateral and sweeps |
Petrobras trade credit and LC capacity solve different parts of the working-capital problem. The reported six-month naphtha concept has a mathematical ceiling near US$950M at the June-plan purchase rate, but that is not evidence of a committed US$950M facility. The published base therefore uses US$500M to US$750M, not a fixed US$500M cap and not the full ceiling.
Outcome probabilities
| Outcome | Probability |
|---|---|
| Plan-to-a-plan EJ followed by the published base package | 55% |
| Standalone cure-and-continue with external standby refinancing | 5% |
| Creditor-favorable consensual recapitalization | 23% |
| RJ | 17% |
EBITDA sensitivities
No Q3 EBITDA result is assumed. US$586M is the company's June planning case. US$750M and US$1.0B are sensitivities only. The key variable is conversion into unrestricted parent cash after working capital, supplier financing, LC movements, capex, interest and protected Alagoas spending.
| Condition | Base EJ | Cure | Creditor-favorable | RJ |
|---|---|---|---|---|
| Q3 EBITDA US$586M, only US$500M Petrobras support, weak conversion | 46% | 3% | 25% | 26% |
| Q3 EBITDA US$750M sensitivity, US$500M to US$750M support, midpoint conversion | 56% | 6% | 23% | 15% |
| Q3 EBITDA US$1.0B sensitivity, at least US$750M support and strong conversion | 65% | 10% | 17% | 8% |
| Q3 EBITDA US$750M sensitivity, Petrobras support only US$250M | 35% | 3% | 27% | 35% |
| Q3 EBITDA US$750M sensitivity, durable support at the US$950M ceiling | 64% | 8% | 19% | 9% |
Change from the prior run
- Petrobras support is now modeled as US$500M to US$750M of secured, commercially priced trade credit rather than equity-like support.
- The US$572M LC rollover is stated separately from US$300M of incremental LC/RCF capacity, preventing double counting.
- IG4 funding increases from US$275M to US$300M funded plus a US$50M backstop.
- Base creditor warrants remain 15%, stepping to 22.5%. The 17.5% to 25% structure belongs in the creditor-favorable case.
- RJ rises modestly from 15% to 17%, not to 22%. Petrobras support makes a negotiated bridge more credible, but the amount and creditor acceptance remain uncommitted.
- Cure-and-continue is separated as a 5% outcome. Paying overdue interest is possible, but it does not solve the December standby or LC runoff.
Most important conclusion
The latest report improves the probability of an interim EJ. It does not make the capital structure solvent by itself. A reported commercial credit concept narrows the immediate liquidity gap, while the final outcome still depends on committed capacity, Q3 cash conversion and creditor support.