Braskem is preparing an extrajudicial restructuring petition to deal with its debt as it faces several maturities in July, according to two sources close to the matter.

The Brazilian petrochemical company plans to complete the transfer of control to its new controlling shareholder, expected this week, conduct the change in management change, and then open a negotiation to approve the possible extrajudicial filing, the first source close said.

Braskem plans to request the extrajudicial proceeding, presenting the support of creditors in the format of a “standstill arrangement,” providing time for the parties to negotiate a proper debt restructuring plan, the second source said.

“The preliminary talks will start this week,” the second source said.

The negotiations will start with advisors, as creditors have not yet signed a non-disclosure agreement (NDA), the second source added.

Braskem has almost USD 150m in international coupon bond payments coming due in July, as reported. In addition to that, there are USD 300m in maturities in letters of credit and USD 90m in domestic bond (debentures) maturities that month, the first source said.

The company has a USD 27.74m coupon payment due 10 July on its 4.5% 2028 international bond, USD 36.13m due 12 July on its 8.5% 2031, USD 13.94m due 22 July on its 7.125% 2041, USD 10.55m due 23 July on its 8.5% 2081, USD 33.75m due 31 July on its 4.5% 2030 and USD 22.03m due 31 July on its 5.875% 2050.

There are also coupons in August, as reported. There is a USD 36.25m payment due 13 August on the 7.25% 2033 bond and USD 41.94m due 20 August on the 6.99% 2032.

An extrajudicial proceeding without a formal proposal, only showing creditor support through a standstill agreement, would be similar to the strategy Raízen adopted recently.

The Brazilian biofuels company filed for an extrajudicial reorganization in Brazil with the support of creditors holding approximately 47% of the debt to be restructured.

In Brazil, an extrajudicial proceeding is similar to a US prepackaged Chapter 11 proceeding. A company may file for an extrajudicial bankruptcy proceeding with the approval of at least one-third of the claims to be restructured and then has 90 days to reach more than 50% of the claims in a class to be impaired.

A Braskem representative declined to comment.