RUN 5S · Q3 SPREAD SENSITIVITY
Better spreads help. They do not solve the balance sheet.
Assume the 27 August same-formula PE spread proxy of US$531/t holds as the Q3 average. The model produces US$500M–US$700M of Q3 EBITDA, with a US$600M midpoint.
The operating bridge
| Input | Run 5S treatment |
|---|---|
| Current proxy | US$531/t; same disclosed feedstock formula, not a company-reported realized spread |
| Company Q3 plan | US$316/t spread and US$586M EBITDA |
| Q3 sensitivity | US$500M–US$700M EBITDA; US$600M midpoint |
| Cash conversion | Not assumed; working capital, interest, capex, Alagoas and Idesa remain separate uses |
Outcome view
31%EJ + capital / equitization
19%EJ extension / PIK
42%Failed EJ → RJ
6%Creditor-favorable deal
2%Cure / refinance
Only a one-point change. Combined EJ outcomes rise from 49% to 50%, while RJ falls from 43% to 42%. The midpoint is only US$14M above the company’s Q3 EBITDA plan.
Mediator’s condition
Use the better operating case to support cash-tested extension terms, not to pre-spend unreported EBITDA. Any capital or equitization trigger should depend on reported liquidity, leverage and cash conversion rather than the spread proxy alone.