Aug 18 (Reuters) – Mexican petrochemical firm Braskem Idesa, a joint venture of Brazil’s Braskem and Mexico’s Grupo Idesa, filed for Chapter 11 bankruptcy in the U.S. on Tuesday after reaching agreements with creditors and shareholders to cut debt by more than $920 million.
The company said it expects to emerge from its bankruptcy proceedings within 60 to 90 days, adding that its day-to-day operations would continue to operate as normal.
Here are some details:
• As part of the agreement, the company will raise fresh capital and reduce total senior debt from about $2.5 billion to about $1.6 billion.
• Braskem, which is Braskem Idesa’s majority shareholder, will contribute $476 million and will continue to own a majority stake in the reorganized company.
• Mexico’s Grupo Idesa and its affiliates will be Braskem Idesa’s largest minority shareholder, the company said.
• Braskem Idesa said that employee wages, benefits, trade vendors and unsecured creditors would be paid under court-approved motions.
• Brazil’s Braskem, which is grappling with over $10 billion of its own debt, is in advanced talks for a potential out-of-court restructuring that could be filed as early as this month, Reuters reported last week.
(Reporting by Anusha Shah in Bengaluru; Editing by Rashmi Aich)
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