By Brazil Stock Guide – Braskem S.A. (B3: BRKM3, BRKM5, NYSE: BAK) said it has engaged financial and legal advisers to prepare a diagnosis of economic and financial alternatives aimed at optimizing its capital structure. The company did not disclose the names of the firms involved, but people familiar with the matter said Braskem hired Lazard Inc. as financial adviser, Cleary Gottlieb Steen & Hamilton LLP as international counsel, and Munhoz Advogados as Brazilian counsel.
The move comes as the prolonged global petrochemical downturn continues to weigh on margins and test the competitiveness of the Brazilian chemical industry. Braskem, already burdened by high debt, has been hit by weaker demand, higher feedstock costs and global oversupply. Credit rating agencies have responded with downgrades, underscoring liquidity concerns.
Braskem reaffirmed its commitment to stakeholders and said it is focused on implementing transformation initiatives to mitigate the impact of the cycle.
Earlier this month, Braskem Idesa, its Mexican subsidiary, took a similar step by hiring also Lazard Inc., Cleary Gottlieb Steen & Hamilton LLP and Sainz Abogados to assess its own capital structure.
Outlook
In a report published this week, Fitch said Latin America’s chemical producers remain trapped in a downturn that began in 2023, marked by weak demand, global oversupply, and trade frictions. Issuers with higher refinancing and liquidity risks are the most exposed to further downgrades.
Fitch has already cut the ratings of Braskem (BB-/RWN) and Braskem Idesa (CCC+). Braskem faces refinancing risk due to cash burn, rising leverage, and significant 2028 maturities, despite holding USD1.7 billion in cash and a USD1 billion credit facility. Braskem Idesa is in a more fragile position: with just USD60 million available against USD2.2 billion in debt, the company has hired financial and legal advisors to assess a potential restructuring.