Braskem negotiation rerun: common brief

Cutoff: 17 August 2026. Use only public information. Separate verified facts from reported facts and inference. Do not read the prior run outputs before forming your position.

Verified public record

  • Corporate gross debt was US$10.3B and adjusted net debt was US$9.5B at 30 June. Adjusted corporate net leverage was 6.74x.
  • Q2 recurring EBITDA was US$1.043B, including US$869M from Brazil/South America. H1 recurring EBITDA was approximately US$1.235B.
  • Q2 working capital consumed US$547M. Braskem attributed this to higher feedstock and product prices, higher inventory volumes, and reduced payment arrangements. The price and volume components are balance-sheet level changes, not a quarterly run rate if prices and inventory stabilize. The financing component is persistent.
  • Cash and cash equivalents were R$3.931B at 30 June, with R$353M inside Braskem Idesa. The June restructuring plan showed approximately US$795M of unrestricted cash.
  • The June plan projected Q3 EBITDA of approximately US$586M and Q3 contractual debt service of US$878M, including US$572M of LC runoff. It projected approximately US$337M of unrestricted cash at 30 September under the status quo.
  • Q3 EBITDA of US$750M is a user-specified sensitivity, not a reported result. Relative to the June plan it adds US$164M of EBITDA. Depending on operational working capital, estimated September unrestricted cash after scheduled Q3 requirements is approximately US$250M to US$500M.
  • Braskem suspended payments covered by the 60-day protective injunction. After cure periods expired in July, it disclosed R$507M, or US$98M, of defaults under certain financial instruments. It did not publicly disclose acceleration as of the cutoff.
  • Public bond terms generally provide a 30-day interest cure period. Holders of at least 25% of an affected series can generally accelerate after an uncured event of default. A majority can generally rescind acceleration before judgment if overdue amounts, expenses and other defaults are cured. Cross-default terms vary by instrument.
  • The US$1.0B standby facility matures on 31 December 2026. The June plan showed US$2.349B of H2 contractual debt service, including LC runoff and the standby maturity.
  • The Brazilian court granted 60 days of protection on 26 June to support mediation. The reported target is action before 24 August. Chapter 15 provisional protection was also obtained in New York.
  • The June creditor framework rejected Braskem's initial five-year extension and coupon reduction. Creditors required positive-NPV treatment, shareholder burden-sharing, cash controls, information rights and direct Petrobras participation. They expressed conditional support for a temporary plan-to-a-plan EJ with protections.
  • Q2 filings continued to describe creditor proposals as indicative and nonbinding, including possible capitalization and collateral. No signed term sheet, sufficient adhesion or committed sponsor funding was publicly disclosed by the cutoff.
  • Braskem purchased R$5.098B of raw materials, finished goods, services and utilities from Petrobras and subsidiaries in H1 2026. Annualized flow is approximately R$10.2B, or about US$2.0B. The June parent-company payable to Petrobras was R$257M, roughly nine days of the H1 purchase run rate.

Latest reported development

Valor Economico reported on 17 August, citing unnamed sources, that Petrobras put commercial support on the table. The concept could extend terms on naphtha purchases currently paid in cash for as long as six months. It would not be a loan or new financial debt. Format, duration, pricing and the exposure cap remained under discussion. Petrobras, IG4 and Braskem did not comment.

Valor also reported:

  • The objective is to obtain one-third creditor support and file an EJ before 24 August.
  • The first filing could be a generic plan-to-a-plan EJ that provides another 90 days for negotiation.
  • Nothing was final and positions remained far apart.
  • The company had proposed five years of principal grace and two and a half years of interest grace, which creditors rejected.
  • No-dividend, M&A and asset-sale guardrails were under discussion.

The mathematical ceiling from moving approximately nine-day Petrobras terms to 180 days is roughly US$950M of incremental trade liquidity. The report says exposure will be capped, so do not assume the ceiling. Test US$250M, US$500M and US$950M caps. Do not treat supplier credit as loss-absorbing capital. If commercially priced, its subsidy value is small even though its liquidity value is substantial.

Alternatives that must be tested

  1. Consensual or plan-to-a-plan EJ with Petrobras trade credit.
  2. A cure-and-continue path in which Braskem pays all overdue interest before acceleration, but still must address LC runoff and the December standby maturity.
  3. Creditor-favorable consensual restructuring with collateral, higher dilution or equitization.
  4. RJ if the stay expires, acceleration begins or liquidity support cannot be committed.

Required operating cases

  • Q3 EBITDA US$586M, the June-plan case.
  • Q3 EBITDA US$750M, with September unrestricted cash of US$250M to US$500M before any new Petrobras facility.
  • Q3 EBITDA US$1.0B, a persistent-spread upside case.

For each case, distinguish EBITDA from cash conversion and show whether the December standby can be paid, extended or must be included in a restructuring.

Required output

State:

  1. Your objective and realistic alternative if negotiations fail.
  2. Whether the Petrobras proposal satisfies shareholder burden-sharing and at what cap, price and duration.
  3. Whether cure-and-continue is credible.
  4. Your opening package, first concession and narrowest acceptable package.
  5. Treatment of maturity, cash/PIK interest, LC and trade facilities, Petrobras, IG4, creditor new money, warrants/equity, collateral, covenants, Mexico and Alagoas.
  6. Outcome probabilities summing to 100%.
  7. The single fact that would most change your position.