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Unigel plans to file for bankruptcy protection

Unigel (RD/D) plans to file for bankruptcy protection, according to two sources close to the matter. The filing is expected to take place in the next few days, the first source said.

Before that, between today (5 February) and tomorrow, the Brazilian chemical producer will announce a “disengagement” in negotiations with holders of its USD 530m 8.75% 2026 bonds, the first source added.

A spokesperson at Unigel declined to comment on the matter.

Negotiations with bondholders are still far from reaching an agreement and the parties are in need of more time, despite some recent progress, the second source said.

The Brazilian chemical firm’s preliminary protection suspending all debt enforcement measures expires on 18 February, as reported.

One of the main deadlocks in the negotiations between the company and the bondholders regards the “cost of the new money,” the first source noted.

The ad hoc group, led by PIMCO, at first asked for an 80% equity stake in the company in exchange for providing USD 150m in funds, later reducing the requested stake to 50%, as reported.

Moreover, the ad hoc group is not large enough to approve an extrajudicial pre-packaged proceeding, according to the first source.

Meanwhile, Unigel’s talks with holders of the BRL 500m (USD 101.2m) domestic bonds have continued to move slowly, according to a third source close.

On 6 December, the domestic bondholders approved the early redemption of the notes and, on 11 December, authorized the filing of an enforcement lawsuit against the company. As a response, the company filed for a precautionary measure and obtained a temporary suspension of individual debt enforcement against it, so that it could conduct a mediation process with creditors.

Unigel had skipped the payment related to the 2026 bonds, and the 30-day cure period expired on 2 November.

The 2026 bonds last traded at 28.083 on 1 February, according to MarketAxess.


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