Uncertainty over Brazil Samarco mine hinders restructuring, firm at risk

jueves 8 de septiembre de 2016 13:59 GYT
 

By Guillermo Parra-Bernal and Stephen Eisenhammer

SAO PAOLO/RIO DE JANEIRO, Sept 8 (Reuters) - Almost a year after a deadly dam spill at the Samarco mine, owned by BHP Billiton and Vale, there is still no date for restarting operations, complicating attempts to restructure Samarco's debt and increasing the possibility the miner may be allowed to run out of money.

Vale and BHP have assured authorities they will cover the cost of Brazil's worst ever environmental disaster, sources familiar with their thinking say, stopping short of saying they will keep Samarco, for whom the closed mine is the only real revenue stream, afloat.

Samarco's debt is trading at distressed levels. The price on Samarco's 4.125 percent dollar-denominated bond due in November 2022, for example, has fallen to 37.50 cents on the dollar to yield 24.17 percent.

Samarco has reached out to creditors to sound out the possibility of renegotiating debt as it faces $50 million in interest payments through November, but sources familiar with the negotiations say they are progressing more slowly than expected.

Vale, BHP and Samarco declined to comment on negotiations.

The main problem, according to seven sources with knowledge of different parts of company and creditor strategy, is a lack of visibility of when the mine may restart.

Originally, Samarco said it expected to resume operations at reduced capacity this year. Now, it has said this will not happen without setting a new timeframe. A spokesman said the timing was in the hands of licensing authorities.

Semad, the environmental licensing authority that needs to approve a restart, has until June 2017 to decide on Samarco's bid to resume operations, though a decision could be made sooner.   Continuación...