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Indebted Brazil-Australia Mine Venture Delays Meeting


The Australian and Brazilian flags fly over the entrance of mine operator Samarco in Mariana, Brazil. Photo: Reuters.

 

Creditors of Brazilian-Australian mining venture Samarco Mineração have postponed their meeting until April 1 after the company presented a new restructuring plan on Thursday.

Samarco, a joint venture between Brazil’s Vale and Australia’s BHP Group, changed its restructuring plan to offer a new alternative to pay creditors, hybrid bonds that will distribute part of Samarco’s cash flow.

The company did not change other conditions in the plan, such as the 75% haircut over the bonds’ face value.

Bondholders that had rejected Samarco’s previous proposal agreed late on Thursday to suspend the assembly to analyse the new proposal and reconvene on April 1 to vote.

If the new proposal is rejected, creditors may present an alternative plan.

Last April Samarco filed a request for a judicial reorganisation to restructure its debt, which totals about 50 billion reais ($10 billion).

The company said the filing was aimed at protecting Samarco’s operations and its workforce, while the company negotiates with its creditors.

Most of Samarco’s debt is held by foreign funds specialised in the purchase of debt securities.

 

  • Reuters, with additional editing by George Russell

 

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.

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