Brazil’s Unigel Seeks 90-Day Debt Payment Extension Amid Financial Problems
Brazilian chemicals and fertilizers producer Unigel announced its intention to request a 90-day extension for debt payments from its creditors, ICIS reported on August 15th . The company, facing financial challenges, has taken this step as part of an ongoing effort to enhance its capital structure. Unigel’s move comes after a series of setbacks, including a delayed release of second-quarter results and credit rating downgrades that pushed its debt commitments into a riskier category.
In June, Unigel engaged the services of a financial advisor to revamp its capital structure following a disappointing Q1 performance and rating downgrades from credit agencies. The company’s financial struggles prompted a suspension of fertilizer production at its Laranjeiras plant due to elevated input costs linked to soaring natural gas prices. Additionally, several chemical production facilities, including styrene and polystryene plants, were temporarily shut down due to unfavorable market conditions.
Unigel has convened a General Debenture Holders Meeting, scheduled for September 5th, to discuss various matters, including the proposed 90-day extension for debt negotiations and the formulation of new debenture terms. The extension, if granted, will allow the company to engage in constructive dialogue with its creditors and chart a path toward financial recovery.
Furthermore, Unigel’s collaboration with Brazil’s energy major Petrobras is poised to play a pivotal role in sustaining fertilizer production within the country. Although specifics regarding the partnership remain undisclosed, it is deemed “essential” to maintaining active fertilizer production in Brazil.