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Creditors of Vale-BHP venture Samarco set to reject restructuring

  • Friday, March 11, 2022
  • Source:ferro-alloys.com

  • Keywords:steel
[Fellow]Creditors of Vale-BHP venture Samarco set to reject restructuring

【Ferro-alloys.com】Creditors of Brazilian miner Samarco Mineracao are expected to reject the company's latest restructuring plan when they gather for an assembly on Thursday.

Samarco, a joint venture between Vale and BHP, is considering making adjustments to the plan but not major changes to the recovery for creditors, said Simon Duncombe, BHP vice president for Brazil non-operated joint ventures.

A letter by bondholders filed in the bankruptcy court on Monday criticised the Samarco proposal, which offers a 75% haircut over the bonds face value or a debt for equity swap that would give a 15% stake to creditors.

Creditors want to be paid in full, with accrued interest and guarantees from shareholders Vale and BHP.

Samarco's proposal is expected to be rejected in an assembly for creditors on Thursday that will vote on the restructuring with any number of creditors present, after the first assembly on February 23 was cancelled due to a lack of quorum.

After rejecting Samarco's plan, creditors are expected to present an alternative plan. The bondholders group said they intended to appoint former Vale executive Tito Martins as one of Samarco executives.

Duncombe said Vale and BHP would not oppose an alternative creditor proposal in principle, "as long as it is sustainable".

He said a proposal by creditors in December asked Samarco to take an "excessive" volume of debt that would squeeze the company's cash flow and reduce payments to remediate environmental damaged caused by the 2015 dam burst. 

  • [Editor:zhaozihao]

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