Samarco Mineracao SA, a bankrupt joint venture between Brazilian miner Vale SA (VALE3.SA) and BHP Group Ltd (BHP.AX), 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.
, proposed on Thursday a plan to restructure 50 billion reais 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.
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.
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.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 reais.
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.
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