BHP's 50% Owned Samarco Files For Judicial Reorganisation In Brazil

BHP Group Plc. (BHP.AX,BLT.L,BBL,BHP) announced Monday that Samarco Mineraço S.A. has filed for judicial reorganisation or JR with the Commercial Courts of Belo Horizonte, State of Minas Gerais, Brazil.

BHP Billiton Brasil Ltda and Vale S.A. each hold a 50 percent interest in Samarco. BHP noted that both companies support Samarco's JR filing.

According to BHP, Samarco's JR filing is a last-resort response to multiple legal actions filed by certain Samarco financial creditors in the U.S. and Brazil which have resulted in freezing orders against Samarco's accounts and which threaten Samarco's operations.

The JR was filed after unsuccessful attempts by Samarco to negotiate a debt restructure with these creditors.

With the JR, Samarco can restructure its financial debts in order to establish a sustainable independent financial position to continue to rebuild its operations safely and meet its Renova Foundation obligations.

Samarco's operations will continue through the JR and restructure process.

BHP said the JR does not affect Samarco's obligation or commitment to make full redress for the 2015 Fundão dam failure, and it does not impact Renova's ability to undertake that remediation and compensation.

Renova has spent approximately $3 billion on its remediation and compensation programs. Compensation and financial assistance of approximately $870 million has been paid to support approximately 320,000 people affected by the Fundão dam failure.

In addition, more than 10,000 claims have been settled over the seven months to March 2021 under the court-mandated "Novel payment" system designed to ensure compensation for claimants who had struggled to prove their damages in the most informal sectors of the economy across 23 territories.

In the coming months, Samarco, BHP Brasil and Vale would continue negotiations with the Brazilian authorities on the programs undertaken by Renova to progress settlement of the R$155 billion public civil claim commenced by the Federal Prosecutors Office against BHP Brasil, Vale and Samarco.

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