© Reuters. A view of the Samarco mine, owned by Vale SA and BHP Billiton Ltd, in Mariana
SAO PAULO (Reuters) – Brazilian mining company Samarco Mineração SA and owners Vale SA (SA:-RRB- and BHP Billiton Plc (L:-RRB- have hired banks to sound out creditors on a potential renegotiation of $3.8 billion in financial obligation, after a deadly dam spill resulted in the shutdown of a crucial mine, a source with direct understanding of the plan stated on Monday. According to the source, BHP Billiton has employed Rothschild & & Co as a consultant on the offer, Vale has generated Moelis & & Co (N:-RRB-, and JPMorgan Chase & & Co (N:-RRB- is recommending Samarco. The source requested for privacy because the procedure is personal. Neither Samarco nor Vale or BHP Billiton has drafted any proposal to creditors, because the talks will depend upon when Samarco’s iron ore mine in the state of Minas Gerais will be allowed to restart, the source said. Bloomberg News first reported the hiring of the count on Sunday. The burst tailings dam at the mine on Nov. 5 released a mud flow that eliminated 19 individuals, left hundreds homeless and contaminated a major river. The government called it the nation’s worst ever ecological catastrophe. The mine has been closed because. Environmental authorities say it will only be allowed to resume when it can prove mud is no longer leaking into the surrounding location and that the mine can be run safely. Vale and BHP decreased to comment. Samarco, Rothschild, JPMorgan and Moelis did not instantly respond to demands for remark. IMPRACTICAL TIMELINE Samarco at first expected to resume operations this year, but admitted recently that the timeline was no longer realistic. FTI Consulting Inc (N:-RRB- has been also worked with as consultant for banks which are owed about $1.6 billion by Samarco, the source added. The remaining $2.2 billion are owed to bondholders, the source kept in mind. FTI declined to comment. The company has actually proposed restarting production at restricted capability and utilizing old mining pits to save tailings. This proposal is still being thought about by local authorities who have not shown when or if they will be approved. Samarco’s 5.375 percent dollar-denominated bond maturing in September 2024 increased on Monday, adding 0.75 cents on the dollar to 47 cents. The bond has lost nearly half its value given that the November spill. Disclaimer: Fusion Media want to remind you that the information included in this website is not always real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex costs are not supplied by exchanges however rather by market makers, and so prices may not be precise and may vary from the real market price, implying rates are indicative and not proper for trading purposes. For that reason Blend Media does n`t bear any responsibility for any trading losses you might incur as a result of using this data. Combination Media or anybody included with Blend Media will not accept any liability for loss or damage as an outcome of reliance on the info consisting of data, quotes, charts and buy/sell signals consisted of within this site. Please be completely notified relating to the threats and costs associated with trading the financial markets, it is among the riskiest financial investment forms possible.