Braskem S.A.'s $409 million superpriority DIP financing receives interim approval in Braskem Idesa’s prepackaged chapter 11 case
Client(s) Braskem S.A.
Jones Day represents Braskem S.A. and certain of its affiliates ("Braskem") in connection with Braskem's approximately $409 million superpriority debtor-in-possession financing to Braskem Idesa, S.A.P.I. and its filing affiliates (the "Debtors") as part of the Debtors' prepackaged chapter 11 proceeding pending in the United States Bankruptcy Court for the Southern District of Texas. The DIP facility—the only actionable financing available to the Debtors—provides $279 million in critical new money to fund the restart and ramp-up of the Debtors' petrochemical complex, which had been operating at a fraction of capacity amid severe liquidity constraints and a prolonged industry downcycle. Absent this immediate capital injection, the Debtors faced a near-certain cessation of operations and liquidation. Uniquely, the entire DIP facility is structured to be satisfied through the issuance of new equity upon emergence, meaning the financing will not increase the Debtors' post-emergence leverage—preserving value for all stakeholder constituencies.
Prior to the chapter 11 filing, a cross border team of Jones Day attorneys spent months advising Braskem in complex, multi-party negotiations with the Debtors and key creditor constituencies to structure a restructuring support agreement and prepackaged chapter 11 plan, during which Braskem provided over $126 million in emergency secured bridge financing to give the Debtors the runway needed to reach agreement and avoid an operational collapse. The engagement draws on the full depth of the Firm's restructuring, finance, and Latin American practices, with teams collaborating across New York, Washington, D.C., Miami, Mexico City, São Paulo, Boston, Amsterdam, and Minneapolis. At the first day hearing the presiding bankruptcy judge approved the DIP financing on an interim basis, which should facilitate the Debtors’ rapid emergence from chapter 11 with a deleveraged balance sheet and restored operations.
