We are advising an ad hoc group in connection with the restructuring

Davis Polk is serving as U.S. counsel to an ad hoc group of financial creditors holding approximately $3 billion aggregate face amount of the outstanding notes and pre-export financing facilities of Samarco Mineração S.A. in connection with the company’s restructuring. On May 31, 2023, Samarco, members of the ad hoc group and other stakeholders collectively entered into a restructuring support agreement (RSA). The RSA contemplates a holistic restructuring to be implemented through a consensual, jointly filed judicial reorganization plan in Samarco’s ongoing judicial reorganization (recuperação judicial) proceeding in Brazil and enforced in the United States through Samarco’s pending chapter 15 proceeding before the United States Bankruptcy Court for the Southern District of New York.

The RSA represents a significant milestone in Samarco’s restructuring process, which has been one of the longest and most complex restructurings ever faced by a Brazilian company. The RSA also reflects the culmination of more than four years of Davis Polk’s involvement in litigation and intermittent negotiations between the ad hoc group, on the one hand, and Samarco and its shareholders, on the other hand. Once implemented, the restructuring will result in the cancellation of Samarco’s existing debt and the issuance of up to $3.82 billion of new notes due 2031, along with certain other new debt instruments. 

The joint plan will be the first creditor-proposed Brazilian restructuring plan put to a vote following a 2021 amendment to Brazil’s insolvency laws that, for the first time, permits creditors under certain circumstances to propose restructuring plans as an alternative to the debtor’s plan.

Headquartered in Belo Horizonte, Minas Gerais, Brazil, Samarco is a mining company with operations in Minas Gerais and Espírito Santo. Samarco’s products include direct reduction and blast furnace pellets and iron ore fines, which supply various industries in the Americas, Europe, the Middle East, North Africa and Asia.

The Davis Polk restructuring team has included partners Timothy Graulich, Angela M. Libby and David Schiff and associates Gene Goldmintz, Jarret Erickson, Paavani Garg, Moshe Melcer and Mary Kudolo. Partners Manuel Garciadiaz, Leo Borchardt and Yasin Keshvargar provided general corporate and capital markets advice. Members of the Davis Polk team are based in the New York, London and São Paulo offices.

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