Aussie dollar climbing… is the iron ore trade back on?
Simandou, one of the world’s most significant iron ore developments, is set to challenge the Pilbara’s dominance soon.
Brazilian miner Samarco Mineracao SA failed to reach an agreement with creditors on a restructuring plan after a new round of meetings, it said on Wednesday, ahead of an April 1 bondholders assembly.
The company, a joint venture of Vale SA and BHP Group PLC, said in a statement it presented bondholders with “significant improvements” to its restructuring proposal,but creditors rebuffed it, saying there was no concrete advance.
Creditors of Samarco had suspended an assembly earlier this month after the company came up with the new restructuring proposal, offering to pay them with hybrid bonds that would distribute part of Samarco’s cash flow.
Bondholders that had rejected Samarco’s previous proposal agreed to postpone their assembly to analyze the new offer from the company. They could also push for an alternative plan, but Samarco said their proposal was not viable.
“The company demonstrated payment prospects and commitments to creditors in the short, medium and long term… (But) it was not possible to reach to date an agreement due to the inviability of some of the most recent bondholder proposals with the business plan of the company,” Samarco said.
“The proposals presented by the funds put at risk the maintenance and the full resumption of Samarco’s operations,” it added.
Creditors, on the other hand, said Samarco went to the table with “unreasonable assumptions and intransigence,” adding that it presented depressed financial projections that were detached from reality and failed to recognize current and projected levels of iron ore prices.
“The group is working at an accelerated pace in the elaboration of an alternative plan, to be presented within the legal deadlines,” they said in a statement.
Samarco said it remains in contact with bondholders’ advisors to reach a “viable agreement that meets the interests of all parties.”
(By Tatiana Bautzer and Gabriel Araujo; Editing by Louise Heavens and Bernadette Baum)
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