Braskem Creditors Want US$3 Billion From Its Owners, and a Rejection Looms

UBS raised its price target for Petroleo Brasileiro (Petrobras) to $23 from $22, while maintaining a buy rating. The company plans to import 650,000 cubic meters of diesel in October. Petrobras shares have seen a 5-day change of 49.45 BRL and a 1st Jan change of +1.60%.

Braskem SA (BAK) creditors are asking controlling shareholders Petrobras (PBR) and IG4 Capital to inject $3B in equity as part of a debt restructuring. Creditors rejected Braskem's August plan, which sought $2B from them. Petrobras resists giving financial guarantees, raising bankruptcy concerns. Braskem filed for creditor protection in June.

IG4 Capital, a Brazilian private-equity firm, has received regulatory approval for a mandatory offer to Braskem minority shareholders, involving debentures instead of cash. Separately, IG4 is preparing a binding bid for Raízen's debt, aiming to gain control through creditors. Braskem is in restructuring with $10.9B in debt, while Raízen's restructuring involves $12.6B in debt and potential equity conversion.

Petrobras' board approved a new Brazilian government diesel subsidy program, adding to an existing subsidy. The new program offers 1 real per liter for 30 days, extendable. Petrobras received 448M reais in gasoline subsidy payments for July 16-31, totaling $1.9B in cumulative fuel-support receipts.

Petrobras received $85M in subsidies, raising total to $1.9B. The company will participate in a new diesel subsidy program, offering R$1.00 per liter for 30 days, potentially extendable. Petrobras can combine this with an existing R$1.12 per liter subsidy. The subsidies help Petrobras manage fuel price volatility and maintain profitability.

Sempra (SRE) subsidiary signed a 20-year LNG supply deal with Petrobras (PBR) for 0.8M tonnes/year, starting in 2030-2031. The agreement covers 6.2% of Port Arthur LNG Phase 2's capacity. Terms and earnings impact were not disclosed. Construction costs are estimated at $14B. Sempra plans to sell 45% of its infrastructure unit by Q3 2026.