Brazil's Samarco, owners hire banks for debt talks -source

lunes 20 de junio de 2016 15:27 GYT

SAO PAULO, June 20 (Reuters) - Brazilian mining company Samarco Mineração SA and owners Vale SA and BHP Billiton Plc have hired banks to sound out creditors on a potential renegotiation of $3.8 billion in debt, after a deadly dam spill led to the shutdown of a key mine, a source with direct knowledge of the plan said on Monday.

According to the source, BHP Billiton has hired Rothschild & Co as an advisor on the deal, Vale has brought in Moelis & Co , and JPMorgan Chase & Co is advising Samarco. The source asked for anonymity because the process is private.

Neither Samarco nor Vale or BHP Billiton has drafted any proposal to creditors, because the talks will hinge on when Samarco's iron ore mine in the state of Minas Gerais will be allowed to restart, the source said.

Bloomberg News first reported the hiring of the banks on Sunday.

The burst tailings dam at the mine on Nov. 5 unleashed a mud flow that killed 19 people, left hundreds homeless and polluted a major river. The government called it the country's worst ever environmental disaster.

The mine has been closed since. Environmental authorities say it will only be allowed to reopen when it can prove mud is no longer leaking into the surrounding area and that the mine can be run safely.

Vale and BHP declined to comment. Samarco, Rothschild, JPMorgan and Moelis did not immediately respond to requests for comment.