What unfolded
Negotiators have narrowed differences on an out-of-court overhaul of Braskem's roughly $11 billion debt load, people with knowledge of the discussions said. One person called it the closest the two camps have come to agreement in these talks, though they also warned that key gaps remain and a deal is not assured.
Each side's blueprint, set out in documents released Saturday, combines a follow-on share sale with an immediate debt-for-equity conversion, and both outline potential extra capital later if needed. The parties have until Nov. 22 to lock in terms, with expectations of an earlier resolution, according to the people.
The competing proposals
Creditors propose an initial package of about $4 billion across fresh equity and debt swapped into stock. That includes an immediate $1.85 billion debt-to-equity conversion, plus a commitment to add another $450 million in June 2029 if required. They back a $2.25 billion follow-on capital raise, and say $1.85 billion of that should be guaranteed by the main shareholders or by outside investors, provided the backstop is committed now. Any backstop provider that is not one of the main shareholders would need creditor approval before the plan itself is approved.
Braskem's plan puts the first-phase total at about $5 billion. It calls for creditors to convert $2.8 billion of claims into equity, and for shareholders and third parties to commit $1.2 billion within a $2.25 billion follow-on offering likely this year. If certain targets require it, shareholders would add up to $500 million, and creditors would supply as much as $1.5 billion through capital and additional conversion in June 2029. The company's plan keeps control and management of Braskem with Petrobras and IG4 Capital Group.
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Where things stand and what it means for your portfolio
Braskem began an out-of-court process in August. Court filings then outlined a framework under which either the main shareholders or pre-approved third parties would provide or backstop new equity after a relief period, with the size, structure and timing still to be determined. Since then, the company and a bondholder group have negotiated to avoid a bankruptcy filing. Earlier, bondholders requested $3 billion of fresh capital from controllers Petrobras and IG4 Capital Group, a request shareholders rejected.
Talks are ongoing and many details remain open. Braskem said it is still negotiating and would not comment further. IG4 declined to comment, and Petrobras did not immediately respond to messages.
For investors, watch whether the $2.25 billion follow-on gets firm backstops, the scale of the immediate $1.85 billion swap, and the June 2029 contingencies. Those pieces drive dilution, control, and the path to a lasting balance sheet fix.
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