Brazilian petrochemical firm Unigel is considering a judicial recovery filing to secure new investments, with plans to complete its sulfuric acid plant in Bahia by early 2026 amid industry headwinds.
Brazilian petrochemical company Unigel is weighing a judicial recovery filing—Brazil’s equivalent of bankruptcy protection—as it negotiates with investors for a much-needed capital injection to support ongoing projects and stabilize operations amid a global petrochemical downturn.
The potential filing, under active consideration, would follow an earlier out-of-court debt restructuring concluded in January 2025, which involved the reorganization of R$4 billion in liabilities and a $100 million capital infusion from bondholders. That agreement resulted in the dilution of the founding Slezynger family’s stake, transferring 50% of the company’s equity to creditors. Now, fresh negotiations are underway, with at least one group of prospective investors requiring a bankruptcy filing as a condition for investing. Sources say Unigel has not opposed the demand.
Unigel is urgently seeking capital to complete its sulfuric acid plant under construction in Camaçari, Bahia—a flagship project viewed as essential to its long-term recovery. Initially budgeted at R$500 million, the plant is now expected to begin operations by December 2025 and generate cash flow in 2026. The facility aims to reduce regional dependence on sulfuric acid imports and will also produce steam to lower energy costs at Unigel’s nearby plants.
An estimated R$100 million to R$120 million is still needed to finalize the plant. Although the funds are reportedly available in reserves, management prefers to conserve liquidity due to sector-wide financial strain and credit constraints. Unigel has already signed non-disclosure agreements (NDAs) with potential investors, who have until October to evaluate its business and turnaround plan. Two financing proposals have been received but deemed too costly.
The company’s performance has faltered amid an industry-wide slump. Unigel’s first-quarter 2025 adjusted EBITDA came in at just R$23 million, well below its forecast of $49 million for the full year. A previous strategic plan aimed to grow EBITDA to $182 million by 2030, but delays in restarting acrylic operations in Bahia and returning leased fertilizer plants to Petrobras have derailed projections.
Unigel has expressed continued interest in a green hydrogen project and is looking for a joint venture partner. Equipment has already been procured for this initiative. Meanwhile, a recent arbitration dispute with Petrobras over gas pricing was resolved in May without penalties, clearing a significant legal hurdle.
In a market filing on July 17, Unigel confirmed that it is working with creditors to establish a temporary standstill agreement, halting debt payments to prioritize investment continuity. The company reaffirmed its commitment to operations, employees, suppliers, and particularly, the completion of the sulfuric acid plant, which it describes as a “significant source of future cash generation.”
