The company is grappling with over $10 billion in debt across operations in Brazil, Europe and the U.S.
The restructuring proposal could come ahead of an August 24 deadline when Braskem's 60-day emergency protection expires, the sources said, requesting anonymity due to the sensitivity of negotiations.
Braskem, which private equity firm IG4 Capital recently acquired from engineering group Novonor, has been facing a prolonged downcycle in the petrochemical sector and is expected to need three to five years to resolve its issues, the sources said.
In addition to depressed prices in the petrochemical sector, Braskem's cash position has been severely weakened by a disaster linked to its salt mines in northeastern Brazil.
The company declined to comment.
While Braskem has been discussing alternatives with creditors, including bondholders and banks, to avoid a lengthy restructuring process, the parties have not reached a deal yet, the sources said. Creditors rejected Braskem's offer to repay principal after a five-year grace period, with a 2-1/2-year grace period for interest payments, sources added.
If the current restructuring discussions proceed, sources said Braskem's out-of-court framework will include a 90-day stay period to negotiate a comprehensive plan, buying time to reach a mutual agreement while protecting it from creditor claims.
Separately, Braskem, whose control is shared between IG4 and Brazilian state-run oil company Petrobras , is exploring restructuring options for its Mexican subsidiary's $2 billion debt, including a potential U.S. Chapter 11 filing timed closely with the Brazilian proceedings, one of the sources said.
