Brazilian pellets producer Samarco, a 50/50 JV between Brazil’s Vale and BHP Billiton, was sued by creditors in the US, accused of making false statements about the company’s Mariana deadly disaster in November 2015.
Investors holding Samarco’s bonds due in 2022, 2023 and 2024, along with Banco Safra’s Cayman Islands branch, argued both Samarco and Ricardo de Aragão, CEO at the time of the accident, made "false and or misleading statements" related to "the longstanding systemic and structural defects" of the Fundão iron ore waste dam, according to a media report.
The lawsuit was filled a few weeks after Samarco missed its second interest payment on bonds. Samarco missed recently a $20 million bond interest payment related to a $700 million bond. In September, the pellets producer failed to pay a $13.5 million interest payment on a $500 million bond.
According to a media report, the lawsuit asks for compensation for any violations of the US securities laws or damages caused to the investors.
The Banco Safra lawsuit said investors were led to believe that Samarco took measures to avoid the disaster, however, such measures weren’t in place.
Additionally, a second media report by Bloomberg citing unnamed sources said BHP Billiton is seeking a debt restructuring plan for Brazil pellets producer Samarco, the JV owned by the Australian company and Brazil miner and iron ore producer Vale.
While Vale wants more time, as it prefers a grace period on payments until Samarco receives the licenses it needs in order to resume operations, people familiar with the matter said BHP’s preference for a restructuring plan would be a “haircut” to creditors.
The two shareholders said they will help Samarco fund cleanup and reparations costs, they’re not willing to cover the debt payments of the pellets producer.
Bloomberg noted that both Vale and BHP Billiton want Samarco to begin operating again, so it can fund the cleanup and meet its payments without their help.