Braskem Sale Remains Uncertain as Apollo Awaits Petrobras Signal

The American management firm Apollo is slowly moving toward the purchase of Braskem, a petrochemical company controlled by Novonor and owner of an important share of the Brazilian petrochemical sector. The sale process has been delayed due to uncertainty regarding Petrobras’ plans, which owns 47% of the voting capital of the petrochemical company, regarding its stake in the firm.

According to sources close to the negotiations, Apollo has finally requested authorization from its board to proceed to the more complex and costly stage of due diligence, six months after submitting a new purchase proposal to Novonor and requesting hundreds of information about the Brazilian company.

Apollo’s Offer Includes 100% of Braskem’s Shares, but No Binding or Non-Binding Purchase Offer Yet

The offer from Apollo includes 100% of Braskem’s shares, including the percentage from Petrobras. However, there is still no binding or non-binding purchase offer, and the due diligence to identify liabilities has not yet begun.

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The management is awaiting Petrobras’ signal regarding the future of its stake in Braskem to take the next step. Following the change in the federal government, the state-owned company suspended the sale of assets with contracts not yet signed for 90 days, starting in March, amid the reevaluation of National Energy Policy and the restructuring of the National Energy Policy Council (CNPE) currently in progress.

New Government Advocates for Petrobras’ Maintenance in the Petrochemical Industry, and Sales to Foreigners Are Unfavorable in Brasília

There are supporters in the new government for the maintenance of Petrobras in the petrochemical industry, as other major oil companies have done. Furthermore, the sale of a strategically important asset to foreigners is not well-regarded in Brasília.

Novonor controls Braskem with 50.1% of ordinary shares and 38.3% of the total. Petrobras holds 47% of ON shares and 36.1% of the total.

Unipar and J&F Investimentos Also Remain Interested in Braskem

Two other potential buyers, Unipar and J&F Investimentos, continue to express interest in Braskem, with acquisition proposals that foresee different formats and could accommodate Petrobras’ interest in certain operations of the petrochemical company.

The Braskem has been the target of various acquisition speculations, due to its importance in the Brazilian petrochemical market. The company has faced legal issues in Alagoas due to ground subsidence around its facilities, which has worsened its financial situation and generated billions of reais in debt. Resolving this liability is a task that Apollo will have to address if it wants to close the deal.

Creditor Banks Are Not Pressuring for a Transaction at Any Price and Agreement with Novonor Allows Automatic Extension of the Deadline for Selling the Petrochemical Company

The creditor banks, which hold Braskem shares as guarantees for debts approaching R$ 15 billion, are not reportedly pressuring for a transaction at any price, they added. At the end of last year, Novonor reached an agreement with the banks, which now consists of the automatic extension of the deadline for selling the petrochemical company for periods of 30 days.

In summary, the sale of Braskem remains an unknown, as Apollo awaits a clear signal from Petrobras, which has yet to decide what it will do with its stake in the company. The situation could stretch on for some time, and other potential buyers remain interested in the petrochemical company, which could result in an increase in the sale price.