Doe Run Peru makes final bid to avoid liquidation

Tue May 15, 2012 11:43am EDT

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* Creditors rejected first restructuring plan on April 12

* Peruvian government is Doe Run's main creditor

LIMA May 15 (Reuters) - Troubled metals exporter Doe Run Peru, a unit of U.S.-based Renco Group, on Tuesday submitted a revised restructuring plan to its board of creditors in a final effort to avoid liquidation.

After rejecting the company's initial restructuring plan last month, creditors voted to start an "operational liquidation" that left room for Doe Run to avoid losing its La Oroya smelter, once one of Peru's largest.

The smelter, owned by New York billionaire Ira Rennart, has been shuttered since 2009 because of protracted financial problems and a stalled environmental cleanup in what has been ranked as one of the 10 most polluted places in the world.

Operational liquidation could result in La Oroya being run by another company, outright liquidation of the plant, or the approval of Doe Run's revised restructuring plan.

The Peruvian government, Doe Run Peru's main creditor, did not consider the initial restructuring plan viable. It would have relied in part on $200 million in credit from commodities trader Glencore. 

"The company, in response to the concerns and relevant observations made by the government, has made significant changes to restructuring plan submitted on April 12," the firm said in a communique.

The statement did not detail the new plan's source of financing, but promised to cover the costs of environmental cleanup and keeping its 3,500-member work force.

"Approval of Doe Run's revised restructuring plan by the board of creditors would permit the immediate initiation of operations at the metallurgical complex," it said. (Reporting By Patricia Velez; Editing by John Picinich)

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