for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up

UPDATE 1-Brazil's Braskem estimates $1.85 billion in provisions due to Alagoas disaster

(Adds information on provisions, chlorine soda plant, company background)

SAO PAULO, Feb 1 (Reuters) - Brazil’s Braskem SA will record approximately 10.1 billion reais ($1.85 billion) in provisions related to an ongoing environmental disaster in the state of Alagoas and will restart operations at a PVC and chlorine soda plant in the state this quarter, the petrochemical producer said on Monday.

The company said in a presentation to investors that 8.8 billion reais of those provisions would be recognized in the fourth quarter of 2020, while approximately 1.2 billion reais had already been outlaid or re-classified.

In 2019, federal authorities said salt mines operated by the company in the city of Maceio threatened the structural integrity of more than 9,000 homes, a claim the company has disputed.

In January 2020, the company announced a deal with prosecutors to provide 1.7 billion reais over two years to relocate and compensate 17,000 residents.

But those figures have steadily risen over time, putting pressure on Braskem’s shares. Eventually, the company reached a 9.1 billion-reais settlement with authorities in December.

In the Monday presentation, the company said it expected to disburse 4.1 billion reais in payments in 2021 and another 4.8 billion reais from 2022 through 2025. The disbursements should not affect the company’s operational cash flow, executives said in comments accompanying the presentation.

Operations at the PVC and chlorine soda plant, which was dependent in part on the now-shut salt mines, will restart this quarter, they added.

Brazil-listed preferred shares in Braskem were up 5.3% in afternoon trade, while Brazil’s benchmark Bovespa equities index was up 1.8%.

The company’s largest shareholders are state-run oil company Petroleo Brasileiro SA and construction group Odebrecht. ($1 = 5.47 reais)

Reporting by Alberto Alerigi Jr. in Sao Paulo and Gram Slattery in Rio de Janeiro Writing by Gram Slattery Editing by Matthew Lewis

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up