Giant company in crisis: debt to be cut by $920 million
The Mexican company Braskem Idesa, which operates in the USA, has filed for bankruptcy (Chapter 11) and will reduce its massive debt from $2.5 billion to $1.6 billion.
An economic drama in the global plastics and petrochemical industry. The Mexican company Braskem Idesa, one of the key players in the field, has announced a comprehensive agreement to settle its debts with its shareholders, lenders, and major bondholders.
As part of the move, the company is expected to reduce its senior debt from approximately $2.5 billion to approximately $1.6 billion, reflecting a reduction of debt by more than $920 million.
To ensure the agreement is implemented quickly, Braskem Idesa and some of its subsidiaries filed voluntary petitions for bankruptcy (Chapter 11) in the court of the Southern District of Texas. The goal the company has set for itself is ambitious: to complete the reorganization process and emerge from the legal proceedings within just 60 to 90 days.
Stepping in to help the company stabilize is the main shareholder, the Brazilian company Braskem. As part of the arrangement, it will inject a total sum of $476 million into the Mexican company, including funds injected prior to the official court filing.
After the reorganization process is completed, the Brazilian company is expected to continue holding the majority of the shares. On the other hand, the Mexican Idesa group and its associated companies will be the largest shareholders among those who are not controlling shareholders.
Regarding the employees, the company reassures that despite entering the Chapter 11 process, ongoing operations continue as usual. Employee salaries and benefits will continue to be paid as normal, and for this purpose, initial motions were filed with the court to allow the company to continue business operations in a standard format.
It should be noted that Braskem Idesa is a significant market player. It was established in 2010 as a partnership between the Brazilian Braskem and the Mexican Grupo Idesa. Since April 2016, the company has operated a massive petrochemical complex in Mexico, producing 1.05 million tons of ethylene and polyethylene per year. It remains to be seen whether the rapid rescue plan will succeed in returning the plastics giant to a safe path.
