Braskem, Latin America's largest petrochemical producer, confirmed on Monday (24) that its board approved filing for extrajudicial recovery, an out-of-court restructuring mechanism under Brazilian law, to renegotiate roughly US$ 10.9 billion (about R$ 56 billion) in financial obligations. According to Brazil Journal, the filing gives the company 90 days to negotiate with creditors and, for now, removes the threat of a court-supervised judicial recovery.
In a notice to shareholders and the market, the company said the measure has a limited, strictly financial scope and does not cover obligations to suppliers, clients and other partners, whose contracts remain in force and continue to be honored.
"Once the relevant documents are formalized, it will file the extrajudicial recovery request, with the goal of ensuring a stable, protected and adequate legal environment for negotiating and implementing the restructuring of its unsecured financial obligations," the company said, in a statement quoted by CNN Brasil.
Under Brazilian bankruptcy law, extrajudicial recovery lets a company negotiate directly with creditors and take the deal to court only for approval. If it fails to win enough support, the process can be converted into a judicial recovery, the Brazilian equivalent of Chapter 11.
Stalemate with banks
Monday's filing capped weeks of talks without a deal. According to CNN Brasil, the 2nd Bankruptcy and Judicial Recovery Court of São Paulo had granted an injunction shielding the petrochemical company from creditor enforcement for 60 days, a deadline that expired on Monday without an agreement. Banks demanded guarantees backed by Braskem's own assets and the contracting of a US$ 700 million loan, which the company refused. A proposal from one of its controlling shareholders, IG4, calls for extending current credit lines by five years with a 30-month interest grace period, with no cut to the principal and no debt-to-equity conversion. In June, rating agencies Fitch and S&P Global downgraded the company, citing its debt load.
The weight of Maceió and the sector downturn
As g1 reports, Braskem's crisis combines the billion-real costs of the geological disaster in Maceió with a long stretch of thin margins in the global petrochemical industry and high indebtedness. The ground subsidence linked to rock salt mining, tied to the company by the Geological Survey of Brazil (CPRM) in 2019, caused one of the largest urban displacements in the country's history: more than 14,000 properties were evacuated and about 60,000 people were affected. Braskem has already paid out more than R$ 4.2 billion in compensation and relocation support for residents and shopkeepers, keeps R$ 3.24 billion provisioned for future costs, and signed agreements worth R$ 1.7 billion with the city of Maceió in 2023 and R$ 1.2 billion with the Alagoas state government in November 2025. In June, a federal court accepted criminal charges brought by federal prosecutors in the case, and the company's shares fell nearly 15% in that session.
The international backdrop also weighs on the company. With China's industrial expansion, which added more than 18 million tonnes of annual production capacity in 2024, according to consultancy ICIS, resin prices fell, and Fitch projects weak petrochemical spreads at least through 2028. Braskem's recurring EBITDA totaled US$ 557 million in 2025, down 49% in one year, and net debt ended last year at US$ 7.5 billion, equivalent to 14.7 times cash generation, according to g1. The rise of Brazil's benchmark Selic rate, from 2% in 2020 to 15% in March 2026, raised the cost of servicing a debt partly denominated in foreign currency. Last week, Braskem Idesa, the company's Mexican joint venture, filed for Chapter 11 bankruptcy protection in the United States.