Braskem S.A. (NYSE:BAK), a major player in the petrochemical industry with a market capitalization of $1.94 billion and currently trading at $5.04, disclosed in a recent SEC filing that a São Paulo court has ruled on an appeal regarding material damages.
According to InvestingPro analysis, the company operates with a significant debt burden and has struggled with profitability in recent quarters. On Monday, the 2nd Reserved Chamber of Business Law of the São Paulo Court of Justice partially favored Novonor's appeal by overturning a previous ruling that had awarded damages to Braskem.
The lawsuit, initiated by José Aurélio Valporto de Sá Júnior and Geração Futuro L. Par. Equity Investment Fund against Novonor SA – em Recuperação Judicial and NSP Investimentos SA – em Recuperação Judicial, centers on Article 246 of Law No. 6,404/76. Novonor, formerly known as Odebrecht, is Braskem's controlling shareholder. With a total debt of $11.87 billion and a concerning debt-to-capital ratio of 86%, the company's financial structure adds complexity to its legal challenges.
The initial sentence had ordered Novonor to compensate Braskem for material damages, but the recent appellate decision has nullified that requirement. The court's ruling is not final and may be appealed to higher courts, which could extend the legal process.
Braskem has made this information available to its shareholders and the market, emphasizing its commitment to transparency. The company, which operates internationally and is headquartered in Brazil, has provided contact details for its Investor Relations Department for those seeking further details.
In other recent news, petrochemical leader Braskem reported a robust Q3 performance despite market challenges. The company announced a significant 130% year-over-year increase in recurring EBITDA, reaching $432 million, and a 35% increase from Q2. Additionally, Braskem revealed progress on its Alagoas initiatives and advancements in its renewable strategy. Sales volume in Brazil grew by 6%, driven by polypropylene and PVC, while the company's liquidity remained robust at $2.4 billion. However, Braskem also noted a consumption of $199 million in recurring cash flow and potential impacts from upcoming maintenance shutdowns on utilization rates in Brazil.
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