Braskem obtains up to $1.2 billion loan to acquire Ipiranga's petrochemical business

By Jennifer Chiou

New York, April 12 - Braskem SA entered into agreements to guarantee the raising of up to $1.2 billion through a bridge loan, according to a 6-K filing with the Securities and Exchange Commission.

ABN Amro Real, Calyon and Citibank led the deal.

The two-year credit facility will be repaid at Libor plus 35 basis points in the first year and Libor plus 55 bps in the second year.

The São Paulo, Brazil-based petrochemical company said that proceeds will be used to finance the acquisition of Ipiranga Group's petrochemical business jointly with Petroleo Brasileiro SA as well as the future delisting of Copesul.

Braskem said that the acquisition is part of its strategy of growth with value creation and consolidating the petrochemical sector in the south of Brazil.

"The positive market evaluation about the new size of the company, the synergies to be captured and the strategic benefits resulting from the Ipiranga acquisition, combined with the confidence in Braskem's financial strength, proved crucial to the success of the operation," Carlos Fadigas, chief financial officer and investor relations director, said in the filing.

The company added that its net debt-to-EBITDA ratio, which is currently 2.7x, will be virtually unaffected by this acquisition.

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