Unigel’s Strategic Comeback: New Plant Spearheads Financial Recovery

Unigel, a key player in Brazil’s petrochemical sector, is charting a course for recovery after a period of financial turbulence. The company’s revival hinges on a new sulfuric acid plant in Camaçari, Bahia, set to begin operations in September.

This move follows a successful debt renegotiation of R$5.8 billion ($980 million). The company plans to invest $36.8 million in the new plant, a project previously halted due to financial constraints.

This initiative is part of Unigel’s broader restructuring plan, which received approval from 71.3% of affected creditors last May. The plan offered creditors equity stakes in exchange for new capital infusion.

Unigel’s financial outlook appears promising. The company projects its adjusted EBITDA to reach US$49 million by the end of 2025, with potential growth to $182 million by 2030.

These projections are based on expected improvements in cash flow once the sulfuric acid project is completed. Notably, Unigel‘s recovery strategy excludes any reliance on fertilizer operations.

These operations are currently subject to ongoing discussions and arbitration with Petrobras. The company has also shelved its green hydrogen production plans, focusing instead on its core petrochemical business.

As Unigel finalizes its restructuring, expected to conclude next week, the industry watches closely. The company’s ability to execute this turnaround plan will be crucial in determining its future in Brazil’s petrochemical landscape.

Background

Unigel faces severe financial challenges due to high input costs, especially for natural gas in its fertilizer operations, coupled with poor demand and low prices in the petrochemical industry.

The company’s financial crisis led to the shutdown of several factories and a debt restructuring process, as it struggled with negative EBITDA and the need to renegotiate terms with creditors

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