Braskem Files for Extrajudicial Recovery to Restructure R$ 56 Billion Debt

Braskem, one of the largest petrochemical companies in the world, filed for extrajudicial recovery on Monday, June 24, in the 2nd Bankruptcy and Judicial Recovery Court of the Capital District of Sao Paulo. The company seeks to restructure debts totaling approximately R$ 56.2 billion, which is roughly US$ 10.9 billion. Braskem has secured the support of 39 percent of its creditors, meeting the minimum requirement to make the request, and now has 90 days to reach the necessary threshold for the plan's approval. Approximately 75 percent of the debt is held by foreign funds, including JPMorgan, Morgan Stanley, Invesco, GMO, and AllianceBernstein, while the remainder is split between local banks, CRAs, and debentures. Some specialists describe the move as a cry for help or a temporary solution that provides short term cash flow relief without addressing the root cause of the crisis. These analysts suggest that the company's situation may be aggravated by governance failures, specifically citing the case in Maceio, and warn that the extrajudicial process could eventually transition into a full judicial recovery. This filing occurs amid a broader trend of financial distress in Brazil, where other major retailers such as Casas Bahia and Marabraz have recently sought judicial recovery due to high interest rates and changing consumer behavior.