Sterlite has US government backing for Asarco acquisition

12 June 2008

Mumbai: The US government has filed court papers supporting the proposed $2.6 billion sale of Asarco LLC, the bankrupt copper mine, to Sterlite Industries Ltd, and said the offer from Asarco parent Grupo Mexico was "defective."

Asarco, which owns three copper mines in Arizona, went bankurupt in 2005 after it failed to pay up $1 billion for environmental clean-up and asbestos claims.

While Grupo Mexico owns 100 per cent of Asarco's equity, it does not have board representation of the bankrupt subsidiary.

Sterlite, a part of the London-based Vedanta Resources Plc, had in May offered to buy the operating assets of Asarco in an all-cash deal.

Grupo Mexico, which made an alternate bid to block the sale of its subsidiary, promised "full recovery" for its creditors.

The US government filed court papers in US Bankruptcy Court in Corpus Christi, Texas, a day ahead of a hearing to approve the sale procedures for Asarco.