Sterlite set to acquire Ascaro for $2.6 billion

26 September 2008

Mumbai: Vedanta Resources flagship company Sterlite Industries (India) Ltd is a step closer to acquiring bankrupt copper miner Asarco after a judge at a US bankruptcy court asked the creditors to vote on competing plans.

Sterlite Industries, a subsidiary of London-listed mining group Vedanta Resources Plc, had in May agreed to acquire Tuscan, US-based smelting and refining company Ascaro for $2.6 billion in cash.

Sterlite claims to have the support of majority of creditors as Asarco's estranged parent Grupo Mexico took away its lucrative mines and incorporated them with the latter's subsidiary, putting Asarco in trouble.

Asarco, formerly known as American Smelting and Refining Company, is an over 100 year old company and is currently the third largest copper producer in the US. It produced 235,000 tonnes of refined copper in 2007. Asarco's mines currently have estimated reserves of approximately 5 million tonnes of contained copper.

For the year ended 31 December 2007, Asarco had total revenues of approximately $1.9 billion.

Sterlite plans to finance the acquisition through a mix of debt and own cash
resources.