Vale reported that the second Business Court of the State of Minas Gerais confirmed Samarco’s judicial recovery plan, as part of the ongoing process, which began in April 2021.
Under the debt restructuring terms in the judicial recovery plan, Samarco’s existing US$4.8 billion of financial debt held by creditors will be exchanged for approximately US$3.7 billion of unsecured long-term debt.

This new long-term debt will have no recourse for the shareholders of Samarco, BHP Brasil and Vale – they each hold a 50% stake in Samarco. According to the company, the plan will not impact Fundação Renova’s ability to implement remediation and compensation programs.

The Transaction and Conduct Adjustment Term (TTAC) signed between Samarco, Vale, BHP Brasil and the federal government of Brazil, together with the states of Espírito Santo and Minas Gerais in 2016, established the creation of the Renova Foundation to implement programs environmental and socioeconomic issues to remedy and provide compensation for the damage caused by the collapse of the Samarco dam.

“Samarco will continue to have the primary responsibility for financing the Renova Foundation and each of the companies Vale and BHP Brasil will continue to have the secondary responsibility for financing 50% of the Renova Foundation, in the event that Samarco does not meet its financing obligations under the terms of the agreement. -frame”, says the company in a statement.

According to the terms of the judicial recovery plan, despite remaining responsible for the framework agreement and the remediation of the dam collapse in general, Samarco’s financing of Fundação Renova will be limited to US$1 billion for the period 2024 to 2030 , subject to certain annual limits, as recently reported by Valor.

Vale emphasizes that it considered several elements associated with Samarco, including judicial recovery, when determining the provision related to the collapse of Samarco’s Fundão dam at the end of the second quarter.

According to the company, the restructuring of Samarco’s debt, including payments to employees and suppliers and the issuance of new unsecured debt to Samarco’s financial creditors, is expected to be completed in the second half of 2023

Fonte: Valor

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