BAK · Braskem S.A.

The thesis

Braskem's restructuring now has named terms, and both sides' proposals include converting debt into equity plus a US$2.25 billion share offering, so dilution for the listed preferred shares is the working assumption. The 30 October 2026 deadline for an agreement in principle and the creditor-support window that closes about 22 November 2026 settle the case.

The ADR closed at $1.19 on 28 October 2026, down from $1.81 on 15 October 2026 and 76.3% below its $5.02 52-week high, in split- and dividend-adjusted daily closes. The three-month price change is -48.9%. The close sits below the $1.45 weekly level named as the invalidation in the previous note, and below the $1.55 close of 2 October 2026 that was the early-October low.

Bloomberg reported on 26 October 2026 that creditors and shareholders are closer to a deal on about US$11 billion of debt than at any earlier point, but that significant differences remain and a deal is not guaranteed. Braskem's 27 October 2026 Form 6-K says the parties exchanged indicative, non-binding proposals and have not agreed final terms. The narrative is accelerating into its deadline: the 26 October 2026 proposal terms are new information, and the 9 October 2026 marker was missed.

Bullish and bearish views on Braskem S.A.

The bull case on Braskem S.A. (BAK), in brief: Terms are now being negotiated in detail. The bear case: Dilution is now specific.

Bull case

• Terms are now being negotiated in detail. Bloomberg's 26 October 2026 report describes both proposals as including a capital injection from main shareholders and third parties. Earlier bondholder demands for US$3 billion from Petrobras and IG4 Capital were rejected, so the shareholder commitment of US$1.2 billion in Braskem's proposal is a change.
• Controllers keep control. Under Braskem's proposal Petrobras and IG4 Capital retain control and management, per Bloomberg on 26 October 2026. That supports continuity of operations and the owners' interest in a deal.
• Creditor base is already signed. Holders of 39.6% of the affected claims backed the plan at filing on 24 August 2026, per Braskem's Form 6-K. Court protection suspended enforcement actions for 120 days from 28 August 2026.
• Operations sit outside the case. The perimeter covers financial debt only; suppliers, customers and payroll are excluded, per the 24 August 2026 filing. Braskem reported Q2 2026 recurring EBITDA of US$1.043 billion on its 14 August 2026 call.
• Targets sit above the price. UBS and HSBC both set $1.50 targets, above the $1.19 close of 28 October 2026.

Bear case

• Dilution is now specific. Braskem proposes that creditors convert US$2.8 billion of debt into equity. Creditors propose US$1.85 billion upfront, with up to US$450 million more in June 2029. Either route adds shares, and holders of the listed preferred do not vote on the outcome.
• The gaps are wide. Per Bloomberg on 26 October 2026, the sides differ on the size of the initial injection and swap (about US$4 billion against US$5 billion), the backstop (US$1.2 billion against US$1.85 billion) and creditor approval rights over third-party backstop providers.
• Deadlines keep moving. Braskem's 27 October 2026 filing says the 9 October 2026 target was not met and the agreement date was pushed to 30 October 2026.
• A Brazilian court froze Idesa funding. On 24 September 2026 a São Paulo judge ordered Braskem to stop new payments, capital injections and guarantees tied to Braskem Idesa; about US$70 million is blocked, per Rio Times.
• Brazilian assets are under pressure. Benzinga headlined on 26 October 2026 that Brazilian stocks were set for a record single-day crash after the Lula election result. The ADR moves with the Brazilian session and the real.

Price setup

The ADR closed at $1.19 on 28 October 2026 with 14-day relative strength index (RSI) at 30.2. On 15 October 2026 the close was $1.81 and RSI was 69.0, so the shares gave back the October recovery within two weeks and returned to oversold readings. The 2 October 2026 close of $1.55 (RSI 27.9) no longer holds as a floor.

The $1.50 targets from UBS and HSBC, both set in September, now sit above the price. Moving-average levels are not available in the adjusted bars used for this note.

Crowding evidence: attention is high, with Bloomberg, Reuters-sourced coverage and Benzinga all running Braskem headlines in the last three sessions. Earnings and the creditor deadline fall inside the next 30 days. The company is a foreign private issuer, so there are no Form 4 insider filings. The follow-on discussed in the proposals is a possible share issuance, not yet filed.

Catalysts, next 30 days

• 11 November 2026: Q3 2026 results per Braskem's company calendar; Earnings Whispers lists 12 November 2026.
• ~22 November 2026, est.: close of the 90-day window to file the updated plan and win class majorities. Petrobras's director cited 24 November 2026 as the date to close the agreement.

Elapsed catalysts

• 30 October 2026: extended deadline to agree commercial terms in principle on the updated plan (Braskem Form 6-K, 27 October 2026). (passed 7d ago)

What would change the view

The case breaks if the final plan sets a debt-to-equity conversion and a share offering larger or cheaper than the 26 October 2026 proposals, or if the creditor window lapses without class approvals and judicial reorganization returns. It also breaks on a daily close below $1.00, a round-number level under the $1.19 close of 28 October 2026.

A filed agreement in principle with a binding shareholder backstop and a conversion near the lower creditor figure of US$1.85 billion would improve the case. Rated LOW: the evidence points to dilution of unknown size, and the outcome is more likely to lag than lead the S&P 500 over the next three months.

What it trades with

BAK tracks BRKM5 on B3, so Brazilian equity moves and BRL/USD changes pass through directly. Petrobras's share price is a related read, as Petrobras is a controlling holder and the source of the capital contribution reported by Valor Econômico. Global petrochemical spreads affect the Q3 results on 11 November 2026, but the creditor deadline has dominated the shares since August.