Braskem negotiation rerun: executive summary
Cutoff: 18 August 2026. Four stakeholder positions were formed independently from an updated common brief that includes Braskem Idesa’s prepackaged Chapter 11. 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, hard milestones and a Mexico leakage covenant |
| 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; no Mexico use |
| LC capacity | Roll US$572M of Q3 LC runoff plus US$300M of incremental LC/RCF capacity |
| IG4/Shine | US$300M funded deeply subordinated parent capital plus US$50M rights backstop. The Idesa US$476M does not count. |
| Creditor warrants | 15% fully diluted at closing, stepping to 22.5% on objective misses, including further Mexico leakage |
| Creditor-favorable case | 17.5% at closing, stepping to 25%, if sponsor support, cash conversion or the Idesa use disappoints |
| Initial principal haircut | None |
| Liquidity floors | US$750M at interim closing and US$1.0B at definitive closing, after the remaining Idesa contribution |
| Collateral | First liens limited to assets financed by Petrobras and genuine new money; limited legacy second lien; no blanket lien on Brazilian crackers |
| Mexico | Separate SDTX prepack. Parent contribution capped at the disclosed US$476M, of which about US$350M remains. No further parent cash, guarantee or cross-collateralization without creditor consent. Preserve the US$82M secured working-capital loan. No credit for the Idesa haircut as parent deleveraging. |
| Alagoas | Safety, compensation and remediation obligations unimpaired and excluded from collateral and sweeps |
Petrobras trade credit and LC capacity still solve different parts of the working-capital problem. The Idesa filing does not replace either product. It is a known cash use at the parent and a closed contagion path in Mexico.
Outcome probabilities
| Outcome | Probability |
|---|---|
| Plan-to-a-plan EJ followed by the published base package | 48% |
| Standalone cure-and-continue with external standby refinancing | 4% |
| Creditor-favorable consensual recapitalization | 25% |
| RJ | 23% |
EBITDA and Idesa 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. Remaining Idesa cash of about US$350M is treated as a parent use unless later filings prove otherwise.
| Condition | Base EJ | Cure | Creditor-favorable | RJ |
|---|---|---|---|---|
| Remaining Idesa US$350M is proven not to be new cash | 56% | 6% | 22% | 16% |
| Q3 EBITDA US$586M, US$500M Petrobras support, weak conversion, Idesa use stands | 38% | 3% | 26% | 33% |
| Q3 EBITDA US$750M sensitivity, US$500M to US$750M support, midpoint conversion | 50% | 5% | 24% | 21% |
| Q3 EBITDA US$1.0B sensitivity, at least US$750M of support and strong conversion | 58% | 8% | 20% | 14% |
| No parent filing by 24 August | 18% | 4% | 18% | 60% |
Change from Run 2
- Mexico is no longer a prospective ring-fence. It is a filed prepack with a disclosed parent contribution of US$476M, of which about US$350M remains.
- That remaining cheque is a use of Braskem S.A. liquidity. It does not recapitalize the US$10.3B corporate stack.
- IG4 funding stays at US$300M plus a US$50M backstop, at the top of Shine’s authority range, because the Idesa money is company cash rather than a new fund cheque.
- Base creditor warrants remain 15%, stepping to 22.5%. The 17.5% to 25% structure remains the creditor-favorable case and the raw mediator result.
- Base EJ falls from 55% to 48%. RJ rises from 17% to 23%. Closing Mexico contagion helps a Monday filing. Thinner parent cash hurts a completed deal.
- Cure-and-continue falls from 5% to 4%. Paying overdue interest is even less plausible after the remaining Idesa use.
Most important conclusion
Idesa is a good Mexico outcome bought with scarce Brazil cash. The parent still needs a protected EJ, rolled letters of credit, capped Petrobras naphtha credit and IG4 junior capital. The Idesa haircut does not do that work.