Braskem faces judicial oversight request amid massive debt crisis

The Public Ministry of the State of São Paulo (MP-SP) has requested the appointment of a judicial administrator to oversee Braskem’s extrajudicial recovery process. The petrochemical giant is currently managing debts exceeding R$ 56 billion (approximately US$ 10.9 billion). The MP-SP cited the absence of a definitive economic plan and significant risks regarding Braskem’s Mexican subsidiary as primary reasons for the request, aiming to protect creditors and ensure transparency.

Braskem’s financial crisis has created a dilemma for its shareholder, Petrobras. While some investors look to the state-controlled company for a solution, Petrobras has indicated it is unlikely to provide an isolated capital injection, fearing increased political and financial tension.

Internal disagreements also persist among Braskem’s stakeholders. Creditors are advocating for restructuring that includes new resources and shared costs between creditors and shareholders. Conversely, Braskem is seeking to extend debt maturities to preserve its control structure without requiring immediate capital contributions from Petrobras or IG4 Capital. The company has also resisted offering additional shares or assets as collateral.