BHP Stock Up As Brazilian Court Ratifies Samarco JV's Judicial Reorganisation Plan

(RTTNews) - Shares of BHP Group Limited (BHP.AX, BLT.L, BBL, BHP) traded higher in London as well as in Australia after a Brazilian court approved the mining giant's plans to reorganize its Samarco Mineraço S.A. joint venture.

Samarco is owned 50 percent by BHP Billiton Brasil Ltda and 50 percent by Vale S.A (VALE). In April 2021, Samarco had filed for judicial reorganisation or JR with the Commercial Courts of Belo Horizonte, State of Minas Gerais, Brazil after multiple enforcement actions by certain financial creditors which threatened Samarco's operations.

BHP now noted that on September 1, the Second Business Court of Belo Horizonte, Brazil ratified the JR Plan of Samarco as part of the ongoing Samarco JR proceedings.

The JR is an insolvency proceeding in Brazil and Samarco's operations have continued during the proceeding.

Following the court ratification, the next steps will include Samarco entering into definitive debt restructure deals with its creditors to implement the debt restructure.

BHP noted that the restructure of Samarco's debt, including payments to employees and suppliers and the issue of new unsecured debt to Samarco's financial creditors, is expected to be completed in the first half of fiscal 2024.

The court's ratification of Samarco's JR Plan follows support of the plan by a majority of Samarco's financial creditors in July 2023 as required under Brazilian bankruptcy law.

Under the terms of the JP debt restructure plan, Samarco's existing financial debt will be exchanged for up to $3.7 billion of long-term unsecured debt. The new long-term debt will remain non-recourse to Samarco's shareholders, BHP Brasil and Vale.

With this, Samarco will be able to restructure its financial debts and establish a stable financial position to rebuild its operations and strengthen its ability to meet its Renova funding obligations.

In London, BHP shares were trading at 2,352 pence, up 2.08 percent. In Australia, BHP shares traded at $45.93, a growth of 2.66 percent.