Braskem, Latin America's largest petrochemical company, filed on Monday (24) for recuperação extrajudicial, a Brazilian out-of-court debt restructuring mechanism negotiated with creditors and later submitted to a court, to restructure about US$ 10.9 billion (R$ 56 billion) in financial debt. The petition was filed with the 2nd Bankruptcy and Judicial Recovery Court of São Paulo, according to a material fact notice sent by the company to Brazil's securities regulator, the CVM. It was backed by creditors holding 39.6% of the claims subject to restructuring, above the legal minimum of one third.
Created in 2002 through the merger of six petrochemical companies linked to the Odebrecht group, Braskem is controlled by Novonor (formerly Odebrecht), which holds about 38% of the capital, with state-run oil company Petrobras as the second-largest shareholder, at about 36%. Headquartered in São Paulo, the company runs 40 industrial plants, 28 of them in Brazil, spread across the states of Alagoas, Bahia, Rio de Janeiro, Rio Grande do Sul and São Paulo, plus units in the United States, Mexico and Germany. It is the leading producer of thermoplastic resins in the Americas, such as polyethylene, polypropylene and PVC, a pioneer in industrial-scale bioplastics, and its shares trade in São Paulo, New York and Madrid.
How the restructuring will work
The filing opens a 90-day protection period during which covered creditors are barred from suing to collect the debts or enforcing claims against the group's assets. In that window, Braskem will try to close a definitive plan: by August 31 it must present an updated business plan and a detailed proposal; in-person meetings between executives, shareholders and creditors are scheduled for September 9; and by October 9 the parties are to seek an agreement on the main commercial terms. To bind the full covered debt, the company needs a simple majority of the claims subject to the plan. The proposal allows part of the credits to be converted into shares, which could turn creditors into shareholders.
The restructuring covers only unsecured financial debt of Braskem S.A. and five foreign group companies. Obligations to suppliers, clients and service providers are left out.
"The extrajudicial recovery has a limited, strictly financial scope and does not cover any of the company's obligations to its suppliers, clients and other stakeholders, which remain in force and continue to be fulfilled as usual, under the terms of their contracts," Braskem said in a statement.
In parallel, Mexican subsidiary Braskem Idesa filed for Chapter 11 bankruptcy protection in the United States. Braskem's plan includes a US$ 476 million (R$ 2.4 billion) capital injection to keep control of the subsidiary.
What pushed Braskem into crisis
According to G1, the filing results from a combination of financial pressures built up in recent years. One is the cost of the geological disaster in Maceió, in northeastern Brazil, caused by rock salt mining, which destabilized the ground under neighborhoods of the capital of Alagoas state. More than 14,000 properties were evacuated and about 60,000 people were affected. Braskem has already spent over R$ 4.2 billion on compensation, aid and relocation of residents and shopkeepers, and keeps R$ 3.24 billion booked for future reparation costs. In June, a federal court accepted criminal charges brought by federal prosecutors in the case, and the company's shares fell nearly 15% in a single session, CNN Brasil reported.
The other factor is the downturn in the global petrochemical market, which faces oversupply, driven by the expansion of China's industrial capacity, falling prices and weak demand. At Braskem, the cost of goods sold came to consume about 96% of net revenue, CNN Brasil reported.
The market reaction was immediate. Braskem shares were down about 6.1% on Monday, trading at R$ 4.76 around 3:15 p.m., according to G1. B3, the São Paulo stock exchange, announced that the common (BRKM3) and preferred (BRKM5) shares will be dropped from a series of indexes, including the benchmark Ibovespa, the IBrX and the Small Caps index, after the close of Tuesday's session (25), because they will start trading under a "Recuperação Extrajudicial" designation. The shares will remain listed and can be traded normally. "When B3 takes a company out of that basket, everyone tracking the index has to sell the paper (...) because the fund's rulebook requires it," Matheus Matos, partner at MA7 Capital, told G1.
With the filing, Braskem joins a string of large Brazilian companies that turned to restructuring mechanisms in 2026, CNN Brasil recalls: retailer Casas Bahia and furniture chain Lojas Marabraz filed for court-supervised recovery, while energy company Raízen and GPA, owner of the Pão de Açúcar supermarket chain, chose the out-of-court route.