Braskem's sale to Lyondell jams and complicates Odebrecht's situation

The situation of the Odebrecht group, one of the pivots of Operation Lava Jato, should be even more complicated with the retimes that emerged in the business seen as the "lifeline" of the conglomerate: the sale of Braskem. Regarded as the "jewel of the crown" of Odebrecht, Petrochemical is being traded with the Dutch LyondellBasell. But, according to four sources close to the transaction, which could bring about R $20 billion to the group, negotiations cooled down in the wake of a series of bad news involving Braskem. According to the state, the number one factor for the reticence of Lyondell in buying Braskem would be the uncertainty generated by the project of extraction of gem salt in Alagoas. According to the Geological Service of Brazil, the process of obtaining the raw material affected the geological structure of neighborhoods of Maceió, causing the sinking of land and cracks in buildings in the city. Source linked to negotiations with Lyondell ranked the situation as "a disaster". The Public Prosecutor's Office in Alagoas requested a blockade of R $6.7 billion from the company. The state Justice contingent R $100 million and prevented the distribution of R $2.7 billion to Braskem's shareholders – which took more than R $1 billion from the Odebrecht holding company at a time of difficulty in cash. The question, said source close to the situation, is that Lyondell does not want to risk buying Braskem While this account is not set. The case went to Federal justice. In relation to the issue of gem salt extraction, Braskem says it "has been conducting a series of geological studies in the region" to define solutions for the neighborhood. The company claims to be collaborating with the authorities in the matter. Another factor that weighed for the cooling of the sale was the suspension of the negotiations of Braskem's papers on the new York Stock Exchange (Nyse) for the non-delivery of the 20-F form of 2017. The company says it works to resolve the situation, but it needs the PWC consultancy to authorizing the changes in processes it is trying to implement – if this happens, it can be traded back in the stock exchange, and no longer in the secondary market. As if the obstacles were not enough, there was a global worsening in the sector, which led Braskem to a weaker performance than expected in the first quarter. As a consequence, Braskem's shares lost about one-third of its value in relation to the "peak" reached in October of last year. On Thursday, 23, the company's role closed to R $42.82. Finally, the company also faced new allegations of embezzlement of money involving Mauricio Ferro, Marcelo Odebrecht's brother-in-law, when the executive was still working in petrochemicals. In February, the Public Prosecutor's Office made an addition to an old complaint, sending US $8 million, which he considered illegal abroad. The defense of Iron asked for the rejection of the addition, saying it is lawful remuneration. Effects The complications in the sale of Braskem reached the full Odebrecht, whose debt would be R $70 billion, without counting the debts of Braskem and Ocyan (business solutions for the oil and gas sector), determined the state. Odebrecht officially says that the debt is R $60 billion and includes Ocyan. Much of the group's debts are undergoing renegotiation. Although some of the creditors reject the judicial recovery, people close to the company say that in some dealings, perhaps this is the only alternative. The blockade of Braskem's dividends only expanded the group's problems. The OEC Construction Company is restructuring a debt of US $3 billion with securities holders, called bondholders. Negotiations are slow and should not be completed in the short term. In this case, because they are pulverized investors, it is likely that the company will have to make an extrajudicial recovery. Atvos (agroindustrial arm) and Odebrecht Realizações (real estate sector) are "candidates" for judicial recovery. The Atvos, which restructed its debt in 2016, lives the most complicated situation. A few months ago, the company delayed payment to the American Lone Star Fund, which entered the justice and achieved the arrest of part of its production. The debt of the company sums about R $11 billion. The OR has lower debt, but also has not reached agreement with creditors. Good news for Odebrecht this week was the sale of the company's headquarters building, for R $500 million, anticipated by the Broadcast column. The value of the business will be used with day-to-day spending, according to sources close to the company. Money brought momentary relief to the company, sources say. In a statement, Odebrecht said that "the group is confident in advancing negotiations, which are complex, demanding time and, as is the case in such topics, are subject to interpretations or speculation." Lyondell told Bloomberg on the 15th that "you'd be surprised" if you didn't make a decision about Braskem until the third quarter.