RIO DE JANEIRO, June 10 (Reuters) - Samarco Mineracao SA, a
bankrupt joint venture between Brazilian miner Vale SA
and BHP Group Ltd, proposed on Thursday a
plan to restructure 50 billion reais ($10 billion) in debt with
an offer of preferred shares or a cash payout in 2041 equal to
15% of the current value of holdings, sources said.
Samarco filed for bankruptcy protection in April to prevent
creditors' claims from affecting operations that restarted at
the end of 2020, more than five years after a tailings dam
collapsed causing one of Brazil's worst environmental accidents.
The 'haircut' plan proposes discounts of 85% on the amount
to be paid to the company's largest creditors who do not accept
preferred shares in the mining company, people with direct
knowledge of the plan told Reuters. They spoke on the condition
of anonymity because they were not authorized to discuss the
matter with media.
To the main group of creditors, which includes bondholders,
shareholders and suppliers, the company proposed converting the
amounts owed into preferred shares entitled to special
dividends, according to the sources.
If creditors do not accept preferred shares, they may choose
to receive payment in cash in 2041 at the 85% discount, but
adjusted for inflation, the sources said. Currently, the mining
company is privately held, with only common shares.
The company confirmed to Reuters its approval of the
restructuring plan, but not the details.
Samarco's debt with Vale and BHP totals 23 billion reais,
while bondholders are owed the equivalent of 26 billion reais.
Debt to large and medium-sized suppliers is about 310 million
The collapse of a dam at the Samarco mine complex in 2015
killed 19 people and severely polluted the Doce River with
mining waste. The company has been the focus of significant
litigation from bondholders holding nearly $5 billion in debt.
The company proposed the full payment of debts to employees,
totaling about 10 million reais, within 30 days after the plan's
approval, the sources said.
To another group that includes small and medium-sized
suppliers, the company also proposed the full payment of
approximately 11 million reais in debts, within 30 days after
approval, for amounts up to 50,000 reais, and within 180 days
for larger debts, the sources said.
Samarco restarted operations in December with the resumption
of one of its three concentrators for processing iron ore at the
Germano complex, located in Mariana, and one of four pellet
plants at the Ubu complex in Anchieta, with a production
capacity of between 7-8 million iron ore pellets.
(Reporting by Marta Nogueira; Writing by Anthony Boadle;
Editing by Kenneth Maxwell)