(Alliance News) - BHP Group PLC on Monday noted that Samarco Mineracao SA on Friday last week filed for judicial reorganisation with the commercial courts of Belo Horizonte in Minas Gerais, Brazil.
BHP Billiton Brasil Ltda and Vale SA each hold a 50% interest in Samarco.
In Brazil, a judicial reorganisation is for avoiding the bankruptcy of companies under financial difficulties by restructuring the business and maintaining its economic operations as a going concern.
For Samarco, the filing is considered a "last-resort response" to several legal actions filed by the company's financial creditors in the US and Brazil, which have led to freezing orders against Samarco's accounts.
Both BHP and Vale have expressed their support for Samarco's filing.
The judicial reorganisation will not affect Samarco's obligation to make its full redress for the 2015 Fundao dam failure, and will allow the Renova Foundation to continue its remediation and compensation programme, under which it was spent around BRL12.2 billion, around USD3 billion, so far.
Samarco's operations were suspended following the catastrophic failure of the Fundao tailings dam in November 2015.
In the meantime, Samarco, Vale and BHP will continues negotiations over the next few months with Brazilian authorities on the work undertaken by Renova, in order to progress the settlement of the BRL155 billion public civil claim commenced against them.
Shares in BHP Group were down 0.9% at AUD46.27 on Monday in Sydney.
By Dayo Laniyan; dayolaniyan@alliancenews.com
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