Braskem fund transfers to Mexican unit blocked by court

A court in São Paulo has issued a preliminary injunction temporarily blocking the Brazilian petrochemical company Braskem from transferring funds to its Mexican joint venture, Braskem Idesa. The block affects a financing package of US$415 million and a US$71 million capital injection intended to support the subsidiary's financial restructuring.

The decision follows a request from creditors who argue that these transfers would deplete Braskem’s own capital. Braskem Idesa, a joint venture between Braskem and Mexico’s Grupo Idesa, filed for Chapter 11 bankruptcy protection in the United States in August to restructure more than US$920 million in debt.

Under the court order, all disbursements are suspended until further notice. Failure to comply could result in fines and the personal liability of company administrators. Braskem has declined to comment on the ruling.