Investor Presentaiton
2016 Braskem | Annual Report
37
IMPACTS OF THE GLOBAL
LENIENCY AGREEMENT
Under the Global Agreement,
Braskem will pay the authorities,
in Brazil and abroad, the total
approximate amount of US$
957 million, equivalent to
approximately BRL 3.1 billion.
Of this total, approximately US$
95 million will be paid in cash to
the United States Department of
Justice (DOJ), US$ 65 million to
the United States Securities and
Exchange Commission (SEC),
approximately CHF30 million to the
Attorney General of Switzerland
and nearly BRL 736 million to the
Federal Public Prosecutor (MPF).
The remaining balance will be
paid by the Company as of 2018,
with approximately BRL 1.5 billion
to the MPF, divided into six annual
payments restated according to
the variation of the IPCA8 index,
maturing on January 30 of each
year, and approximately CHF64
million to the Attorney General
of Switzerland, divided into four
annual payments, due on June 30
of each year.
Due to the provision of the fine
referring to the Global Agreement
in the fourth quarter of 2016, the
Company recorded a consolidated
net loss of BRL 2.6 billion in 4Q16,
and BRL 729 million for the year.
Loss attributable to shareholders
for the year was BRL 411 million.
Except for the amount of the
Global Agreement mentioned
above, as well as other non-
monetary penalties imposed on
Braskem under the terms of said
agreement, the Company is not
able to predict or measure at this
time the extent of the financial
and non-financial impacts, if
any, that the confirmation of
the allegations, possible actions
of other authorities, parallel
investigations, or the execution
of the Global Agreement may
cause for the Company, or the
resources that may be necessary
to remedy such occurrences.
The Global Agreement may
have an adverse material
effect on Braskem's business,
reputation, financial condition,
and operating results, as well
as on liquidity and the price of
securities issued by Braskem.
RISK RATING AGENCIES
In 2016, Braskem maintained
the investment grade rating by
Standard & Poor's and Fitch
Ratings (BBB-) and presented a
credit risk above the sovereign
by the three largest risk rating
agencies:
Fitch Ratings: in September
2016, Fitch reaffirmed Braskem's
global scale rating as BBB-
and changed the outlook from
negative to stable. This change
was supported by the Company's
strong cash generation,
diversification of the raw material
matrix by beginning operation at
the Braskem Idesa Petrochemical
Complex (Mexico), the cash
position maintained abroad, and
the availability of a revolving credit
line available for withdrawal.
Standard & Poor's: despite
the downgrade of Brazil's
sovereign rating by S&P in
February, Braskem had its global
rating reaffirmed at BBB- with
a negative outlook, driven by
Braskem's solid cash position
910 A
D-910 B
and the fact that the Company
has operations outside of Brazil.
Moody's: in February, Moody's
downgraded Brazil's sovereign
rating and maintained the
negative outlook. According to
the agency's scale, the grade
fell two steps to Ba2. In this
sense, following the drop of
the sovereign rating, Moody's
lowered Braskem's risk rating
by one grade to Ba1. Even with
the downgrade, Braskem has a
risk rating above the sovereign.
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