Judicial reorganization internal

Judicial Reorganization

What is Judicial Reorganization?

A Judicial Reorganization (“JR”) is a procedure provided for by law, aimed at companies
that need to restructure their debts. Thus, Judicial Reorganization allows the recovery of
the financial health of companies that have debts to be renegotiated.

It is important to point out that JR is a process that should not be confused with bankruptcy. Judicial Reorganization is a legal proceeding used to assist a company in the restructuring of its obligations, through a class action process. The goal is to make overcoming the economic and financial crisis of the debtor company possible, in order to allow the maintenance of its operating activities, the employment of workers and the interests of creditors. This is the case of Samarco, which needs to restructure its indebtedness and its balance sheet to maintain its operations.

Samarco’s Judicial Reorganization Plan, filed in June 2021, was improved throughout the negotiation process within the scope of the JR, from the dialogue with creditors until reaching the current version based on the agreement signed with financial creditors and shareholders.

Why has Samarco chosen this path?

On April 9, 2021, Samarco filed a request for Judicial Reorganization (JR) to restructure its debt, which is mostly financial. The filing for Judicial Reorganization aims protecting Samarco’s operations and its workforce while the company negotiates with its financial lenders and other stakeholders.

To achieve this goal, the legislation provides that the processing of the Judicial Reorganization stays or “freezes” individual enforcements filed by lenders, during a given period of (at least 180 days extendable for the same period) until ratification of the plan by the court. After approval, all pending financial issues related to the Judicial Reorganization period will be replaced and settled according to the conditions of the plan.

During the entire process, we will maintain current production activities and other regular
operations, so there will be no interruption or change in remediation and compensation
measures for the damage caused by the collapse of the Fundão dam.

The main request made in a Judicial Reorganization is that, after the resolution and approval of the creditors on the Judicial Reorganization Plan presented, the same be ratified by the Court.

What is the current financial and operational status?

Samarco has approximately BRL 50 billion of financial debts that are subject to Judicial
Reorganization. Moreover, the company is responsible for remediation and compensation
measures for socioeconomic and socio-environmental damage resulting from the collapse
of the Fundão dam, thus having the obligation to make contributions to Renova Foundation,
a non-profit entity created to implement remediation and compensation programs.

Pursuant to the agreement signed with various public authorities (the so-called TTAC and
other agreements), this commitment may also, from time to time, generate financial contribution obligations in favor of Renova Foundation. Considering that the law determines
that obligations arising after the filing for JR are not subject to the judicial reorganization, the funds that may be required by Renova Foundation must be paid regularly by Samarco.

In this context, the company reiterates its firm commitment to comply with its obligations of full remediation and compensation of damages arising from the collapse of the Fundão dam, regardless of the request for judicial reorganization, pursuant to the statement of claims of JR.

Some key points of Samarco’s current Business Plan:

Samarco currently expects to reach full production capacity by 2028;
The increase in production capacity is directly related to the availability of new tailings
disposal facilities, construction of new filtration plants and their respective licensing
processes;
The current Business Plan was extensively discussed by Samarco with the assistance of
external consultants and with its shareholders;
Samarco’s operational limitations and the commitments to meet its obligations related to
Fundão dam collapse are fundamental parameters in the feasibility of restructuring plan of
the company.

What are Samarco’s debts and how do we intend to address them?

A large part of Samarco’s financial debt was incurred before the Fundão dam failure in 2015 and related to funding provided to enable projects for expansion of the company’s production capacity. After the failure of the Fundão dam, most of the debt became concentrated in the hands of a foreign funds who are specialized in acquiring the debts of companies in crisis (called distressed funds).

Samarco also has debts with its shareholders, Vale and BHP Brasil, related to fund to Samarco after the Fundão dam collapse, in order to allow the company to survive, build a new tailings filtration plant and resume its operations. These funds also made various socio-economic and socio-environmental remediation and compensation measures possible, with special emphasis on Renova Foundation, as determined by the TTAC.

Debt	Description	Payment Plan
Employees	Claims due before the JR filing	Full payment of the claim, in a single installment, plus adjustment to inflation based on the IPCA and simple interest of 1% per month, from the date of the request, until the date of the actual payment. Payment will take place by the 15th of the month following the date of publication of the JRP ratification decision in the Electronic Official Gazette (DJE) or the validation of banking data for inactive employees. or the validation of banking data for inactive employees.
Financial creditors in foreign currency	Claims owed to financial creditors (mostly foreign funds investing in distressed assets) before the filing for the JR	A) Receipt through senior debt securities maturing on June 30, 2031, with a 25% discount on the credits listed on the order date, plus interest. B) Receipt through a long-term loan maturing on June 30, 2035 with no discount.
Partnering Suppliers	Claims due before the JR filing	They will be paid in up to two installments, the first of up to BRL 85 thousand and the second referring to the remaining balance. Payment of the first installment will be made by the 15th of the month following the validation of the information provided for joining the partner supplier status, and the second installment will be paid by the 15th of the month following the payment of the first, both with adjustment to inflation based on the IPCA and plus simple interest of 3% per annum, from the date of application.
Micro and small businesses (“ME/EPP”)	Claims due before the JR filing	They be paid in full in a single installment by the 15th of the month of publication of the JRP ratification decision in the DJE or validation of bank information for inactive suppliers, plus adjustment to inflation according to IPCA and simple interest of 1% per month from the order date.
Shareholders	Claims due to shareholders before and after the filing for the JR, are mostly funds made available after the collapse of the Fundão dam and related to funding of Renova Foundation.	A) Conversion of part of the credits equally into Samarco common equity interest; and B) Conversion of part of the credits equally into subordinated debt, with payment not before June 30, 2036.

The new Reorganization Plan filed on 28 July 2023 was developed based on the assumption that Samarco’s duties to fund Renova Foundation and to comply with its obligations to fully remediate the damage caused by the Fundão dam collapse would not be affected.

The improvements contemplated in the new Plan and in the agreement entered into with the creditors concluded in May 2023 provide for a limitation of Samarco’s contributions to the Renova Foundation of up to USD 1 billion, from which the amounts will be covered by the shareholders, thus ensuring the remediation and protection of Samarco’s cash. It is important to emphasize that such claims are not legally subject to the effects of the Judicial Reorganization.

Additionally, the shareholders agreed to treat the payments of their claims resulting from
the contributions made directly by them to Fundação Renova after the request for Judicial Reorganization in a subordinate manner to the other creditors. It is important to emphasize that such claims are not legally subject to the effects of the Judicial Reorganization.

The cash flow projection assumes, among other things, that Samarco will operate at 100% of capacity until 2028, and that it will continue to fulfill its commitments related to compensation and remediation actions for damages arising from the collapse of the Fundão dam, and also continue to fulfill its social function.

Why is this new plan considered fair and the best one for all Samarco’s stakeholders?

Judicial Reorganization Plan is aligned with Samarco’s social role and the assumptions of its

business plan, taking into account its operational capacity and its financial debt:

• Samarco’s Restructuring Plan is adequate, considering the circumstances

• It was created to protect Samarco’s purpose and future;

• It is appropriate, considering (i) the assumptions of its Business Plan, and (ii) the
responsibility for remediation and compensation for the damage caused by the Fundão
dam collapse, including contributions to Renova Foundation, under the terms of the TTAC;

• It proposes that Samarco pay creditors and shareholders the amounts owed, offering different payment flow options to each of the two groups and preserving its operational capacity and contributions to the Renova Foundation.

Employees will be paid in full, in a single installment, plus adjustment for inflation based on the IPCA and simple interest of 1% per month, from the date of the request until the date of actual payment. Payment will take place by the 15th of the month following the date of publication of the JRP ratification decision in the Electronic Official Gazette (DJE) or the data validation date for inactive employees.

Suppliers of Micro and Small Companies will be paid in full in a single installment, plus adjustment for inflation according to the IPCA and simple interest of 1% per month from the inclusion of said claim in the list of creditors, until the 15th of the month fof publication of the JRP ratification decision in the DJE.

Partner suppliers will be paid in a single installment (up to BRL 85,000) or in up to two installments (above BRL 85,000) by the 15th of the month of publication of the JRP ratification decision in the DJE, with adjustment for inflation based on IPCA and simple interest of 3% per year, from the date of application or final registration of the claim in the list of creditors.

Cost of the remediation and compensation obligations for the damage caused by the collapse of the Fundão dam, including contributions that may arise in favor of Renova Foundation, respecting the mechanism for limiting contributions by Samarco agreed with the shareholders and financial creditors, which preserves the operation of the company and its investment capacity, while maintaining the obligations assumed with full compensation.

Tax obligations continue to be managed by Samarco.

Financial creditors in foreign currency: a) Receipt through senior debt securities maturing on June 30, 2031, with a 25% discount on the credits listed on the order date, plus interest. b) Receipt through a long-term loan maturing on June 30, 2035 with no discount.

Shareholders: a) Conversion of part of the credits equally into Samarco common equity interest; and; b) Conversion of part of the credits equally into subordinated debt, with payment not before June 30, 2036.

Facts about Samarco’s Judicial Reorganization

The claims to be restructured through Samarco's Judicial Reorganization total approximately BRL 50 billion in debt. About BRL 26 billion are related to bonds held by financial creditors and approximately BRL 24 billion are debts of Samarco owed to its shareholders Vale and BHP Brasil.

The shareholder claims subject to the JR are in part funds that were provided by Vale and BHP Brasil as a loan for the maintenance of basic operations of Samarco during the period in which it was not producing (enabling Samarco to survive) as well as funding of the restart of its operations and large investments in building new tailings filtration facilities to help Samarco restart sooner and at a higher capacity.

Part of this is also related to the contributions made to Renova Foundation directly by shareholders due to Samarco’s unavailability of cash, as agreed by the Adjustment and Conduct Transaction Term (TTAC).

A large part of Samarco’s financial debt was incurred before the Fundão dam collapse in 2015 to enable projects for expansion of the company’s production capacity. Foreign funds bought the debt securities of the original creditors and started to implement aggressive measures for immediate debt enforcement.

It is important to clarify that Samarco is the main party responsible for the contributions to Renova Foundation and; therefore, it must continue to honor these and any other commitments regarding full compensation of the damage caused by the Fundão dam collapse.

The Fundão dam failed in 2015 and the TTAC was entered into in March 2016. Therefore, several of the aforementioned foreign funds, which have claims against Samarco, purchased such claims after the dam collapse and even after the TTAC was signed in a public and well announced manner. In other words, these funds knew that Samarco had and still has the obligation to compensate all the impacts caused, and was also the primary party responsible for the contributions to Renova Foundation for socio-economic and socio-environmental remediation and compensation measures, as provided for in the TTAC.

In July 2021, ratified in September 2021, the list of creditors of the Judicial Reorganization prepared by the Judicial Administrators was presented in the case records, and this did not include Renova Foundation as a creditor in JR, which reinforces the fact that there will be
no interruption by Renova Foundation of its remedial measures and social and environmental compensation.

Samarco’s Judicial Reorganization Plan, filed in June 2021, aims at restructuring the company’s debt, which is mostly financial and held by foreign funds specialized in the purchase of claims in the secondary market.

Financial creditors and shareholders are being granted the same payment options. Shareholders have made large and necessary investments in Samarco after the failure of Fundão dam to help the company rebuild its operations.

The financing that shareholders provided throughout this period, of USD 4.2 billion (or R$24 billion), was paid in full.

The Judicial Reorganization Plan has two options for the financial creditor or even the shareholder who is a creditor to choose – one is to receive senior debt securities with interest rates and maturity defined in the plan and the other is to obtain payment in cash in the short term (60 days) with 95% discount.

The Judicial Reorganization Plan offers shareholders the right to get part of this claim back, on a pari passu basis (on equal terms) with foreign funds.

In July 2021, Samarco signed non-disclosure agreements (NDAs) with advisors to financial creditors and the Due Diligence process (analysis of company information) was initiated. Consequently, Samarco was ready to start negotiations.

Samarco informs that the Courts has granted the company’s request for additional 180 days of the period of protection against the enforcement of debts or freezing of accounts
(stay period).

In October 2021, the Court granted Samarco’s request for an extension, for another 180 days, of the company’s protection period against enforcement actions (stay period) The second call of General Meeting of Creditors (AGC) was scheduled for 27-Oct-21, and was not held due to lack of quorum.

On 15-Dec-21, after resuming negotiations with creditors, Samarco presented a new restructuring proposal at a meeting held in New York (USA). The new terms of the proposal, as previously agreed with the creditors, were disclosed to the market on 27-Dec-21 (blow out).

A new General Meeting of Creditors (AGC) was scheduled for 23-Feb-22 (first call) and on10-Mar-22 (second call) to vote on Samarco’s plan.

During the AGC, on 10-Mar-22, Samarco presented a third evolution of the proposal with relevant changes in points requested by creditors. The majority of creditors decided to suspend the AGC to resume on 01-Apr-2022.

On 21-Mar-2022, Samarco resumed negotiations with financial creditors and meetings were held in NY to discuss the proposals. However, as it was not possible to reach an agreement, the negotiations were blown out, as provided for in the NDA signed with the creditors, on 29-Mar-2022.

The AGC was resumed on 01-Apr-22, and Samarco presented a new Judicial Reorganization Plan reflecting the last proposal presented by the company Samarco during the meetings held with creditors in NY.

At the AGC held on April 18, 2022, on second call, Samarco presented a new plan that was rejected due to the representativeness of the credits, most of which were in the hands of financial creditors who did not agree with the proposal. It is important to note that the plan was approved by majority of JR’s individual creditors.

On May 19, 2022, the Metabase and Sindimetal unions presented an alternative plan. Another alternative plan has also been put forward by a group of financial creditors. The plans were reviewed by Samarco’s external auditors who found that the financial creditors’ alternative plan was technically unfeasible and; therefore, the company opted to support the unions’ plan.

In July 2022, a mediation procedure was initiated at the State Appellate Court of Minas Gerais, with its stage concluded in September 2022 without the conclusion of the conciliation of the parties – Samarco and financial creditors.

On May 31, 2023, Samarco reached an agreement with some of the financial creditors and its shareholders, which was the basis of a new Judicial Reorganization Plan to be considered by the creditors, and if approved by the majority, ratified by the JR Court. The conciliation between the parties was held at the State Appellate Court of Minas Gerais and was an important milestone for the conclusion of the process in JR. This agreement served as the basis for the preparation of the new Judicial Reorganization Plan (PJR) presented in the case file on July 28, 2023.

Key events

Creditor enforcement actions in 2020 and 2021

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Samarco tried to negotiate foreign funds with creditors.

However, creditors filed lawsuits in the US in September 2020 and in Brazil in February, March and April 2021.

Samarco files request for Judicial Reorganization on April 09, 21

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JR was the only alternative found by Samarco to defend itself against measures to collect foreign funds.

Samarco reiterates its firm commitment to complying with its obligations to fully redress the damage resulting from the Fundão dam collapse, regardless of JR.

Publication of list of creditors in May 2021

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It does not include Renova Foundation as a creditor in the JR.

Samarco files a Judicial Reorganization Plan on 10-Jun-2021, and proposes adjustments to the plan on Feb-23, Mar-10, and Apr-1, 2022, due to improvements in the proposals resulting from agreements signed with shareholders that made it possible to limit the contributions to Renova by Samarco, bringing forward the full resumption to 2029 and subordinate part of the shareholders’ judicial reorganization claims.

Samarco files for the Judicial Reorganization Plan on June 10

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Plan created to protect Samarco’s purpose and future, as well as benefit its communities

The Plan is appropriate, considering (i) the assumptions of its Business Plan, and (ii) the responsibility for the remediation and compensation of damages caused by the Fundão dam failure, including contributions to Renova Foundation, under the terms of the TTAC

Preparation for negotiation

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In July 2021, Samarco signed non-disclosure agreements (NDAs) with creditors’ advisors and the Due Diligence process (analysis of company information) was initiated. Consequently, Samarco is ready to start negotiations.

Samarco files the Judicial Reorganization Plan on June 10 2021

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Call of Meetings of Creditors

The first General Meeting of Creditors (AGC) was scheduled for October 20 and 27, 2021 (first and second calls), and, in the second call, the composition of the creditors’ committees was resolved. A new meeting was scheduled for February 23 and March 10, 2022 (first and second calls) to vote on the Judicial Reorganization Plan (JRP). Samarco submitted improvements to the proposal, but the vote was suspended, being resumed on April 1 (with a new suspension) and April 18, 2022, when the rejection of the plan was resolved.

Alternative plans are presented in May 2022

Two alternative plans were presented, the first being by the unions Metabase Mariana and Sindimetal Espírito Santo and the second by a group of international creditors.

Court calls conciliation hearing

In June 2022, the Courts convened a conciliation hearing with the participation of the Judicial Administrators (JAs), representatives of the Financial Funds, Samarco and its shareholders Vale and BHP Brasil, the Public Prosecution Office, the members of the Creditor Committee, the creditors and other stakeholders. In August 2022, a mediation meeting was held without an agreement.

Parties reach agreement in May 2023

In May 2023, Samarco reached an agreement with some of the financial creditors and its shareholders, based on conciliation provided by the State Appellate Court of Minas Gerais (TJMG). This agreement served as the basis for the preparation of the new Judicial Reorganization Plan (PJR) presented in the case file on July, 28, 2023.

Interviews and articles

FOR SAMARCO, SUSPENSION OF THE MEETING WILL ALLOW NEGOTIATION TO MOVE ON

01/04/2022 | VALOR ECONÔMICO Download

SAMARCO AND MEMBERS EXPECT TO AGREE WITH A NEW JUDICIAL REORGANIZATION PLAN

10/03/2022 | VALOR ECONÔMICO Download

SAMARCO DELIVERS NEW REORGANIZATION PLAN AND PURSUES PEACE WITH CREDITORS

23/02/2022 | ESTADÃO Download

VALE SIGNS A COOPERATION AGREEMENT WITH SAMARCO IN THE PRODUCTION AREA

02/02/2022 | VALOR ECONÔMICO Download

SAMARCO PRESENTS NEW PLAN TO PAY CREDITORS

24/02/2022 | VALOR ECONÔMICO Download

RECOVERY PLAN REINFORCES SAMARCO’S SUSTAINABILITY

13/12/2021 | ESTADO DE MINAS Download

RESUMPTION OF ACTIVITIES BY SAMARCO CHEERS SUPPLIERS

20/10/2021 | DIÁRIO DO COMÉRCIO Download

SAMARCO: COURTS EXTEND JUDICIAL REORGANIZATION FOR 6 MONTHS

13/10/2021 | UOL Download

SAMARCO REORGANIZATION: DEFENDING JOBS AND PRODUCTION

30/09/2021 | ESTADO DE MINAS Download

SAMARCO’S CREDITOR CONSIDERS THE MINING COMPANY’S REORGANIZATION PLAN POSITIVE

24/09/2021 | ESTADO DE MINAS Download

SAMARCO: THE DETAILS INVOLVING THE JUDICIAL REORGANIZATION AND ITS RESUMPTION

16/08/2021 | CBN VITÓRIA Download

CHANGES IN SAMARCO

10/08/2021 | O GLOBO Download

SAMARCO MAKES A POSITIVE BALANCE SHEET

31/07/2021 | ESTADO DE MINAS Download

SAMARCO’S PLANS TO SHIELD THE OPERATION AND OVERCOME THREATS FROM CREDITORS

30/07/2021 | GAZETA ONLINE/VITÓRIA Download

SAMARCO WANTS TO CONVERT CREDITOR INTO SHAREHOLDER TO PAY THE DEBT

23/07/2021 | O TEMPO Download

PLAN FOR SAMARCO’S CREDITORS IS APPROPRIATE, LAWYER SAYS

26/06/2021 | ESTADO DE MINAS Download

Access the documents

Understand the new Judicial Reorganization Plan

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Judicial Reorganization Plan – July/2023 07/29/2023 Download

Judicial Reorganization Plan Summary 07/29/2023 Download

Judicial Recovery Plan 04/15/2022 Download

Judicial Recovery Plan 04/01/2022 Download

Judicial Reorganization Plan presented at the General Meeting of Creditors 04/01/2022 Download

Judicial Recovery Plan 03/10/2022 Download

Judicial Reorganization Plan presented at the General Meeting of Creditors 03/10/2022 Download

Judicial Recovery Plan 02/23/2022 Download

Financial Economic Report 02/23/2022 Download

Judicial Reorganization Plan Summary 06/14/2021 Download

Judicial Recovery Plan 06/10/2021 Download

Financial Economic Report 06/10/2021 Download

Appraisal Report of goods and assets 1 06/10/2021 Download

Appraisal Report of goods and assets 2 06/10/2021 Download

Appraisal Report of goods and assets 3 06/10/2021 Download

Appraisal Report of goods and assets 4 06/10/2021 Download

Announcements and Releases

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Samarco :: Ratings 02/16/2024 Download

Samarco announces substantial completion of debt restructuring with foreign financial creditors 12/01/2023 Download

Deadline for filling out the Digital Form for Creditors 09/18/2023 Download

Digital Form for Creditors 09/06/2023 Download

Court approves Samarco’ s Judicial Reorganization Plan 09/01/2023 Download

Announcement – Documents to support the alternative plan 05/10/2022 Download

Judicial Reorganization – Offers with Untrue Information 31/03/2022 Download

Notice on hiring facilitators 02/08/2022 Download

Samarco files a Judicial Reorganization plan 06/10/2021 Download

Justice grants the processing of Samarco’s Judicial Reorganization 04/12/2021 Download

Samarco files for judicial reorganization 04/09/2021 Download

Negotiation with Creditors

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Judicial Reorganization Plan – July/2023 07/29/2023 Download

Description of the notes 07/29/2023 Download

Press release – Samarco files consensual Judicial Reorganization Plan for a comprehensive Restructuring 07/29/2023 Download

Blow out materials – July/2023 07/29/2023 Download

Blow out Materials 12/27/2021 Download

Blow out Materials – May/2023 05/31/2023 Download

Samarco reaches an agreement with financial creditors 05/31/2023 Download

Samarco Note: agreement with financial creditors 05/31/2023 Download

Blow out Materials Aug 2022 03/16/2023 Download

Progress of the process 04/07/2022 Download

Samarco Note: Negotiation with Financial Creditors 03/29/2022 Download

Blow out Materials_March 2022 03/29/2022 Download

Public Notice

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Notice to holders of epp claims originating under certain pre-export financing agreements 11/24/2023 Download

Notice to holders of unsecured notes claims 11/24/2023 Download

Final EPP Lenders Assignment Acknowledgment Form 10/11/2023 Download

Foreign Creditors – Final EPP Lender Election Form 10/11/2023 Download

Foreign Creditors – Final Bondholder Election Form 10/11/2023 Download

Noteholder Election Form (“Election form”) 09/22/2023 Download

EPP Claim Election Form 09/22/2023 Download

Notice for holders of EPP Claims 09/22/2023 Download

Page 6 – Call notice for the general meeting of creditors 02/14/2022 Download

Page 7 – call notice for the general meeting of creditors 09/30/2021 Download

Public notice from creditors 09/28/2021 Download

Public Notice Samarco – art.52 05/03/2021 Download

Documents

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Petition – Analysis of Alternative Plans 06/20/2022 Download

Annex 1 – Apsis Report 06/20/2022 Download

Annex 2 – Opinion Satiro 06/20/2022 Download

Annex 3 – Comparative Table Articles of Incorporation 06/20/2022 Download

Annex 4 – Board Powers Comparative Table 06/20/2022 Download

Minutes of the General Meeting of Creditors on second call 04/01/2022 Download

Minutes of the General Meeting of Creditors on second callAta da Assembleia Geral de Credores em segunda convocação 03/10/2022 Download

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