Braskem Makes Coupon Payment Amid Ongoing Debt Review

(Bloomberg) — Braskem SA, one of the world’s largest petrochemical producers, paid off interest due on some of its dollar bonds on Monday, easing investor concerns as it continues to review debt amid a prolonged industry downturn, people with knowledge of the matter said.

The sources said the Brazilian firm made payments for dollar bonds maturing in 2028 and asked not to be named because the information is not publicly disclosed. The company had about $64 million in those bonds and bonds due in 2031, according to data compiled by Bloomberg.

Braskem declined to comment.

This month’s obligations include coupon payments on bonds maturing in 2030, 2050 and 2081. The bonds maturing in 2081 are hybrid bonds and were among the biggest losers in the selloff that rocked Braskem; because its bonds allow the company to defer interest payments without triggering default.

Braskem, which is struggling with low prices in the petrochemical market and an environmental disaster at one of its salt mines, has $130 million in debt payments due this month, data show. The firm had $1.3 billion in cash as of the end of September and secured a $1 billion credit facility in October.

Braskem hired consultants last year to review its capital structure. Analysts at Fitch Ratings downgraded the credit rating to CC late last year, flagging “high” refinancing risk and liquidity pressure.

Troubled conglomerate Novonor SA, which jointly controls Braskem, is working on a deal to sell its shares to a fund advised by asset manager IG4 Capital.

Meanwhile, the company said its subsidiary Braskem Idesa SAPI had failed to reach agreement on a restructuring proposal.

–With help from Rachel Gamarski.

(Updates with company comment in third paragraph, more context in fourth paragraph.)

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