A Brazilian judge has given Unigel Participacoes temporary protection from creditors, according to a Bloomberg report on Dec. 14. Any executions on the debt will be suspended by no more than 60 days, according to the decision made by Judge Paulo Furtado de Oliveira Filho.
The company is expected to use the time to seek a mediation process with creditors over its debt restructuring. Earlier in the week, a request to fend off creditors had been denied by a different judge, and the company sought to reverse the decision.
Unigel had sought the temporary protection after local bondholders in a Dec. 6 meeting voted to declare the early maturity of some notes, triggering an acceleration of the troubled chemical and fertilizer maker’s dollar debt.
Unigel, which was also holding separate talks with external bondholders, had its credit score cut to default by S&P Global Ratings in November after skipping a $23.2 million interest payment on the dollar bonds.
Unigel just recently signed an agreement to sell 100% of Plastiglas, its Mexico-based acrylic sheet manufacturer, to the Verzatec Group (GM Dec. 8, p. 26). The sale is in line with Unigel’s plan to readjust its capital structure. Sale proceeds are to be used to strengthen the company’s cash position.