Vale-BHP JV Samarco says it has not yet reached agreement with creditors

SAO PAULO, March 30 (Reuters) – Brazilian miner Samarco Mineracao SA failed to reach an agreement with creditors on its restructuring plan after a new round of meetings, it said on Wednesday, ahead of an April 1 bondholders assembly.

The company, a joint venture between Vale SA and BHP Group PLC, said in a statement it presented bondholders with "significant improvements" to its restructuring proposal, but no deal had been reached.

Creditors of Samarco had suspended an assembly earlier this month after the company came up with the new restructuring proposal, offering an alternative 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 reconvene on April 1 to vote on the offer. They could also push for an alternative plan, but Samarco said their proposal was inviable.

"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.

Samarco said that it remains in contact with bondholders' advisors to reach a "viable agreement that meets the interests of all parties."

(Reporting by Tatiana Bautzer and Gabriel Araujo, Editing by Louise Heavens)

By Matt Earle

Matthew Earle is the Founder of MiningFeeds. In 2005, Matt founded MiningNerds.com to provide data and information to the mining investment community. This site was merged with Highgrade Review to form MiningFeeds. Matt has a B.Sc. degree with a minor in geology from the University of Toronto.

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