Braskem intends to use the time gained from a precautionary measure to reach an agreement with creditors to request an extrajudicial restructuring, two sources close to the matter said.

The Brazilian petrochemical company is working on an updated version of the proposal it had presented to creditors, both sources said.

“The company still does not have a negotiation schedule with creditors, but it is likely that there will be adjustments to the proposal,” the first source. The changes in the offer are still under internal discussions, the same source said.

Braskem announced today (25 June) the filing of a precautionary relief request in a São Paulo court, to temporarily suspend individual debt enforcement against it. It has initiated a mediation proceeding before the Wind Mediation Chamber (Câmara Wind de Mediação).

The provisional remedy, called “antecedent injunctive relief” (tutela de urgência cautelar, or tutela cautelar antecedente), is a debt restructuring alternative available under Brazilian bankruptcy law. If granted by a court, debt enforcement is suspended for 30 days, with the possibility of extending it to an additional 30 days.

If granted, Braskem intends to file a Chapter 15 in the US to have recognition of the Brazilian case as the main proceeding, according to the second source.

The filing was motivated by debt service payments in July and August, and not by another external trigger, the two sources close to the matter said.

Braskem was already talking to creditors about the possibility of this filing, as there were several payment due dates approaching and the parties did not have time to continue the negotiations, the first source close said.

The Brazilian petrochemical producer initially presented a proposal to bondholders without a haircut, with all bonds would be extended by five years, including a two-year PIK feature and a 200bps reduction in interest payments, as reported.

Bondholders have been seeking a significant contribution from shareholders in the restructuring, as reported.

The cleansing materials released by Braskem today detailed the proposal made to creditors. Under the extrajudicial proceeding, the most affected claims would be reinstated into new instruments with amended terms.

Financial unsecured creditors would have their claims extended by five years from current maturities, while retaining their unsecured status. This proposal was directed to bondholders, local bondholders (debentures), CRAs holders, the revolving credit facility, bilateral loans and exchange creditors agencies (ECAs), according to the document released.

Interest would be paid at 100% PIK from July 2026 through December 2028 at the borrower’s option, after which 200bps would be added.

The proposal also included a new committed unsecured letter-of-credit facility of up to USD 1.5bn, which included up to USD 1.3bn of rolled-over existing letters of credit plus USD 200m in new commitments, according to the documents. The facility will be adjusted by SOFR+ 200bps and would mature in five years.

The ad hoc group of creditors rejected Braskem’s proposal, arguing that it failed to reflect the company’s actual financing needs and did not provide sufficient compensation to creditors for the concessions the company was requesting, according to the documents released.

The group was mainly not pleased with the proposed coupon reduction, describing it as unprecedented in a corporate restructuring, and said any deal would need to include a larger contribution from Braskem’s shareholders. The creditors also said they would not support unnecessary maturity extensions, according to the cleansing materials.

At the same time, the creditors said they would be willing to support an extrajudicial filing provided it includes creditor protections. These would include restrictions on new debt, liens, dividends, asset transfers and related-party transactions without creditor consent, ongoing access to company information and due diligence, reimbursement of creditors’ advisory costs, and active, good-faith participation by Petrobras in negotiations, according to the document.

In Brazil, an extrajudicial proceeding is similar to a US prepackaged Chapter 11. 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.

According to Brazilian bankruptcy law, when a company files for an extrajudicial proceeding, it obtains automaticaly a stay period protection, while the case admission ruling remains pending.

Braskem’s restructuring was also seen as needing a haircut to address the borrower’s liquidity and leverage in the long term, as reported.

Eight international bonds are outstanding, totaling approximately USD 7bn, including seven unsecured bonds and one hybrid instrument. The bonds mature between January 2028 and January 2050, while the hybrid bond has a first call date in January 2081.

A USD 1bn revolving credit facility was fully drawn in October 2025 and matures in December 2026.

Braskem has almost USD 150m in international coupon bond payments 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, as reported.

There is a USD 27.74m coupon payment due 10 July on Braskem’s 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: 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.

A representative from Braskem declined to comment.