Brazilian pellet producer Samarco, a 50/50 joint venture (JV) between Vale and BHP Billiton, plans to raise $2 billion by issuing new preferred stocks, according to court documents. The company, which is under bankruptcy protection, aims to get the capital injection in 2022.
According to a debt restructuring document obtained by SteelOrbis, Samarco labeled the capital raising through new stocks as “absolutely necessary to the feasibility of the company’s bankruptcy recover plan.”
The company said it would issue new preferred stocks, types A and B, to back its debt restructuring and bankruptcy recover plan. Samarco said its proposed capital increase is subject to approval by creditors, which shall meet during a general meeting. The company’s debt restructuring plan also needs to me ratified by a court, it added.
Samarco said the capital increase is needed for the “continuity” of the company’s activities, which may also include investments.