Perth-based Mundo Minerals’ wholly owned Brazilian subsidiary Mundo Mineração has filed for creditor protection from a Brazilian judge against a US$8.1 million debt.
Mundo Mineração said in a statement it had sought commercial “standstill” agreements with its lenders and creditors, but had been unable to satisfy the requirements of one of its lenders.
Mundo owes US$8.1 million of term debt and hire purchase commitments to four local banks in Brazil.
The lender required receipt of approval to commence development at its Crista open pit mine, and the provision of additional corporate guarantees by Mundo Minerals.
If the judicial order is granted, there is a stay on 43 per cent or US$3.5 million of local bank debt against Mundo Mineração for 180 days.
If granted, Mundo Mineração will have 60 days to present a reorganisation plan for creditors to approve, which will then be implemented over an extended period.
The company said the reorganisation may be supported by a refinancing package, the sales of assets and/or the eventual cash flow from the Crista open pit operation.
The final license approval for the Crista open pit is unlikely to be determined until February 2012, according to the company.
Mundo Minerals managing director Ashley Pattison said preservation of the company and its subsidiaries’ assets was a key decision point for the board and the protection was sought to prevent any involuntary action being taken by secured and unsecured creditors in Brazil.
