By Luciana Magalhaes
SAO PAULO, April 2 (Reuters) – Rising petrochemical prices have buoyed the long-term prospects for Brazil’s Braskem, even as the company is racing against the clock to deal with looming interest payments on its debt.
The petrochemical producer, with operations in Brazil, the U.S., and Mexico, is considering whether to seek an injunction to avoid a painful debt restructuring, a person close to the company told Reuters, as the stronger market outlook is not enough to provide short-term relief.
Brazilian newspaper Valor was first to report that Braskem could file a petition seeking protection from its creditors.
Braskem said in a securities filing it is considering alternatives under its ongoing restructuring talks, including eventual measures of protection against creditors.
Citibank analysts this week raised Braskem’s target price from 8 to 10 reais per share, citing stronger petrochemical spreads based on supply disruptions due to the war in the Middle East.
Braskem has about $100 million in interest payments on its international bonds due by the middle of this year, along with growing debt pressures at its Braskem Idesa joint venture in Mexico, the source said on condition of anonymity.
The petrochemical industry has weathered a prolonged downcycle, with spreads well below historical averages, leaving Braskem with $9.4 billion in debt and just $2.1 billion in cash by the end of 2025.
Adding to Braskem’s challenges, a planned management change has run into delays. Brazilian conglomerate Novonor agreed in December to sell its controlling stake in Braskem to IG4 Capital. The private equity firm would share control with state-run oil firm Petrobras, the second-largest Braskem shareholder.
That handoff, originally expected to happen in early 2026, has been pushed back to around May, according to the source, leaving some of the debt negotiations in limbo. IG4 declined to comment.
Expectations of a management change at Braskem have helped to boost its share price by about 15% so far this year to 9 reais.
Citi analysts said Braskem’s improved operational outlook may reduce the urgency for immediate capital structure adjustments, such as a restructuring plan involving a capital injection or possible reduction in its debt through a renegotiation with creditors.
(Reporting by Luciana Magalhaes; additional reporting by Andre Romani in Sao Paulo; Editing by Paul Simao)
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