Braskem negotiation rerun: common brief (Run 4)

Cutoff: 18 August 2026, evening (approximately 20:50 CT). Use only public information. Separate verified facts from reported facts and inference. Do not read prior run outputs (rerun-2026-08-17, rerun-2026-08-18, run-output) before forming your position.

This rerun exists because Run 3’s published clearing package still assumed IG4 would fund about US$300 million of junior parent capital and treated the AHG as one chair that would take a 15 percent warrant deal. Evening public color is harder on both points.

Player constraints that this run must honor

These are the reasons for the rerun. Agents must not “solve” them by inventing a recap that the public record says will not be signed.

  1. Petrobras will not inject capital. Pipeline Valor, 18 August 12:16 BRT, reported that in a Tuesday meeting bondholders demanded a Petrobras commitment to invest in Braskem if financial metrics are missed, as the condition for supporting an extrajudicial filing and a 90-day negotiation. Pipeline reported no willingness from Petrobras or IG4 to inject capital or to nationalize the company. Treat a contingent Petrobras put, common-equity injection, keep-well, or parent guarantee as rejected, not as a bargaining chip that clears in Round 3. Lei 13.303, TCU scrutiny, the 4 October 2026 election, and IFRS 10 / consolidation of the US$10.3 billion stack if voting control is lost or common is issued are the hard stops. Petrobras voting is 47.03 percent; total capital 36.15 percent. Joint control with Shine. The live Petrobras instrument remains unsigned capped naphtha working-capital terms, not equity.

  2. IG4 / Shine will not recapitalize the parent. Same Pipeline report: no IG4 aporte. Shine acquired 50.1108 percent of voting capital and 34.3234 percent of total capital from NSP/Novonor through a distressed exchange, not a cash recap of Braskem S.A. IG4 disclosed AUM around US$1 billion; do not treat that as uncalled Braskem dry powder. The Idesa US$476 million is company / Braskem Netherlands cash, not an IG4 fund cheque. Do not use a US$300 million Shine junior facility as the base-case clearing chip unless you can explain why Pipeline is wrong and why Petrobras would allow IG4 to be the only cash sponsor. Control retention is the product IG4 bought. Conversion that drops controllers below 10 percent remains rejected.

  3. Elliott is hostile and is not the whole book. Named holders in public reporting: Elliott Investment Management (international notes and reported largest lender on the US$1.0 billion RCF), Contrarian Capital Management (hard group with Elliott on the Petrobras-cash ask, Bloomberg 10 August), Strategic Value Partners (notes and some RCF, reported as not a formal Elliott pairing), AllianceBernstein, Capital Group, and PGIM (Bloomberg compilation of major bondholders). Local banks (Itaú, Safra, KfW, Bladex, DZ, SMBC and others) are reported as supportive of an EJ. The creditor agent is the AHG steering position dominated by Elliott / Contrarian. It must also state, separately, what Capital / AllianceBernstein / PGIM would likely accept to peel for a one-third filing, and what local banks would accept. Do not assume a public blocking percentage for Elliott. Do not assume the steering committee is 51 percent of the notes.

  4. Filing math is per espécie, not two-thirds of the stack. Lei 11.101 art. 163 §7: more than one-third of each affected class to protocolar an EJ; more than 50 percent of each class to homologate. Pipeline’s “two-thirds to file” is wrong. If NY notes are one class, more than about US$2.35 billion of the listed ~US$7.0 billion parent securities is needed to file that class. Estadão has reported that without some bondholders the company cannot reach one-third. A notes-out EJ does not stay Elliott after 24 August.

Verified public record through 17 August

  • 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. These already exclude Braskem Idesa project debt.
  • Q2 recurring EBITDA was US$1.043B (Brazil/SA US$869M, US/Europe US$147M, Mexico US$57M). H1 recurring EBITDA was approximately US$1.235B. Do not annualize Mexico. Utilization there was 43 percent.
  • Q2 working capital consumed US$547M. Price and volume components are level resets if prices and inventory stabilize. Lost supplier finance is persistent.
  • Cash and cash equivalents were R$3.931B at 30 June, with R$353M inside Braskem Idesa. The June plan showed about US$795M of unrestricted cash.
  • June plan: Q3 EBITDA about US$586M; Q3 contractual debt service US$878M including US$572M of LC runoff; about US$337M unrestricted cash at 30 September under the status quo.
  • Q3 EBITDA of US$750M is a sensitivity, not a reported result.
  • After July cure periods Braskem disclosed R$507M / about US$98M of defaults under certain financial instruments. No public acceleration as of this cutoff.
  • Public bond terms generally: 30-day interest cure; 25 percent of a series can accelerate after an uncured event of default.
  • The US$1.0B standby / RCF was drawn in October 2025 and matures 31 December 2026. Elliott is reported as its largest lender. H2 contractual debt service in the June plan was US$2.349B including LCs and the standby.
  • 60-day Brazilian tutela granted 26 June; reported expiry Monday 24 August 2026. Chapter 15 provisional relief in New York from 30 June. Stay covers invited Wind Chamber financial creditors only. Trade is not stayed.
  • June AHG framework rejected five-year extension plus coupon cut. Creditors required positive-NPV treatment, shareholder burden-sharing, cash controls, information rights and Petrobras at the table. They expressed conditional support for a temporary plan-to-a-plan EJ with protections. That is not adhesion to Braskem’s economics.
  • July: bondholders including Elliott offered (i) DIP that converts and drops controllers below 10 percent or (ii) maturity extension at existing coupon with all assets as collateral. Braskem rejected both.
  • Fitch revised the parent to RD on 17 August after uncured interest defaults. Fitch has said a subsequent EJ or RJ filing would take ratings to D. Fitch’s menu if there is no new money: asset sales, shareholder injection, or liability renegotiation.

Listed parent securities at 30 June (US$ million outstanding): ’28 1,250; ’30 1,500; ’31 850; ’33 1,000; ’34 850; ’41 587; ’50 750; hybrid ’81 231. Total about US$7.02B. Remainder of the US$10.3B stack is the drawn RCF plus debentures, CRAs and bank / ECA lines.

Verified 18 August: Braskem Idesa prepack

From the 18 August 6-K and company announcement:

  • Senior debt about US$2.5B to about US$1.6B. Prepack Chapter 11, SDTX, expected 60 to 90 days.
  • Braskem will contribute US$476 million, of which about US$126 million was already made available. About US$350 million remains. Treat as a live parent / Netherlands cash use unless later filings prove it is only a restatement of the existing term loan (US$180M committed / US$129M disbursed) or the US$82M Idesa-secured WC loans. The term-loan lender is a separate supporting party.
  • Braskem keeps a majority. Idesa / affiliates largest minority.
  • Separate estate. No disclosed parent guarantee of the remaining about US$1.6B. No parent Chapter 11 or RJ.
  • Idesa haircut does not recapitalize the US$10.3B corporate stack.

First-day reporting (BankruptcyData, 18 August; treat as court-document reporting, not a 6-K): RSA support 76.55 percent of senior secured notes and 100 percent of the Inbursa term loan. Reorganized equity split one-third to Braskem for funding value, one-third to secured noteholders (US$825M equitized), one-third to existing shareholders (about 58 percent Braskem, about 8.3 percent Etileno XXI). Braskem-backed DIP: up to US$279M new money plus about US$130M roll-up, 10 percent PIK; DIP converts into Braskem’s equity allocation, not cash-repaid at exit; plus US$71M effective-date cash. Interim DIP target within two business days; confirmation / final DIP within 40 days; effective date within 55 days. Disclosure statement flags that certain Braskem actions could be reviewed in Brazil if the parent enters EJ or RJ.

Idesa was already an unrestricted subsidiary on older parent indentures. The prepack is not a J.Crew drop-down of Camaçari.

Sources:

Reported 18 August: parent talks

Pipeline Valor, 12:16 BRT. Tuesday bondholder meeting: Petrobras contingent injection if metrics missed, as the price of supporting an EJ filing and 90-day talks. No willingness from Petrobras or IG4 to inject or nationalize. Company still offering five-year extension, three-year grace, no haircut. Local banks described as supportive. Pipeline repeats an incorrect two-thirds filing bar. Idesa spin in the same piece (no holding impact, earmarked cash, Slim raising the 25 percent) is company-friendly; do not treat it as a parent-guarantee analysis. TQPM equity-support agreement exists; Slim as that lender is why they say no holding cross-default.

https://pipelinevalor.globo.com/negocios/noticia/o-impacto-do-chapter-11-da-braskem-idesa-para-a-holding.ghtml

Valor / Bloomberg (17–18 August). Petrobras weighing capped naphtha payment-term relief (purchases now often cash / short-dated, conceptually toward six months). Not a loan. Not signed. Cap, price, duration open. Parties far apart. Goal: one-third support for a generic 90-day EJ, not a finished plan. Mathematical ceiling of moving about nine-day payables to 180 days is roughly US$950M; do not assume the ceiling. Test US$250M, US$500M, US$950M. Supplier credit is liquidity, not loss-absorbing capital.

O Globo, 17:36 BRT. Company-side sources: Braskem is preparing to file an EJ next week before 24 August. First filing is a 90-day process plan, not a recap. No asset sales in the first filing (no time for a roadshow); asset sales may come later inside the 90 days. The URL slug claims creditor approval; the body still recites the one-third bar. Do not treat this as locked adhesion.

https://oglobo.globo.com/economia/negocios/noticia/2026/08/18/braskem-consegue-aval-de-credores-e-prepara-pedido-de-recuperacao-extrajudicial.ghtml

Fitch. RD already. EJ or RJ filing → D, per Fitch commentary reported 18 August.

Alternatives that must be tested

  1. Thin plan-to-a-plan EJ next week with guardrails, no Petrobras or IG4 cash equity, naphtha terms unsigned or capped, local-bank plus peeling long-only support, Elliott / Contrarian hostile or outside.
  2. Consensual economic EJ (five-year, cash/PIK, warrants) without a sponsor recap.
  3. Cure-and-continue (pay the disclosed ~US$98M and refinance). Test after the remaining Idesa cheque.
  4. Creditor-favorable deal: conversion, all-asset liens, or a Petrobras put. Test whether sponsors will sign. Public record says no.
  5. RJ of Braskem S.A. if Monday is empty or the thin EJ cannot be filed / homologated. Brazilian RJ: debtor-in-possession, weaker absolute priority than Chapter 11, headcount plus art. 58, equity often survives. Process discount 15–25 percent. LC / trade / utilization risk. Parent RJ can attack the remaining Idesa funding.

Required operating cases

  • Q3 EBITDA US$586M (June plan).
  • Q3 EBITDA US$750M (sensitivity).
  • Q3 EBITDA US$1.0B (upside sensitivity).

For each, show cash conversion, the remaining Idesa use, LC runoff, and whether December standby is paid, extended, or restructured. No Q3 result is assumed.

Required Mexico treatment in every package

  1. Separate estate or not.
  2. Any further parent cash / guarantee after the disclosed US$476 million.
  3. Treatment of the US$82M secured WC loan and the term loan.
  4. No credit for Idesa haircut as parent deleveraging.
  5. Majority ownership: option worth keeping versus cash leak to stop.
  6. Whether a parent EJ or RJ filed before Idesa’s ~55-day effective-date milestone can freeze the remaining contribution / DIP.

Required output

  1. Objective and realistic alternative if talks fail.
  2. Whether unsigned naphtha terms satisfy burden-sharing after Idesa, at which cap.
  3. Whether IG4 cash is available at all. If you put a number on Shine, justify it against Pipeline.
  4. Whether Elliott / Contrarian will support a one-third filing without a Petrobras put. If not, how a filing still happens.
  5. Opening, first concession, narrowest acceptable package.
  6. Maturity, cash/PIK, LCs, Petrobras, IG4, creditor new money, warrants/equity, collateral, covenants, Mexico, Alagoas.
  7. Outcome probabilities summing to 100 percent. Use at least: thin/process EJ; economic EJ with a completed term sheet; cure-and-continue; creditor-favorable (conversion or put); RJ.
  8. The single fact that would most change your position.