Asarco judge dumps sweetened Sterlite offer; backs Grupo Mexico bid again
25 September 2009
A US bankruptcy judge has rejected a sweetened $2.565 billion offer by Sterlite Industries Ltd for US copper miner Asarco LLC, saying the bid came too late. Instead bankruptcy judge Richard Schmidt asked the US district court judge in Brownsville, Texas to approve Grupo Mexico's $2.4799 billion offer.
Sterlite, the Indian arm of London-based mining major Vedanta Resources, raised its offer for Ascaro after the judge's recommendation in favour of Grupo Mexico's offer for Asarco in August.
Judge Schmidt of the bankruptcy court in Corpus Christi, Texas said he still believed the Grupo Mexico offer has enough cash in it to pay Asarco's debtors. Sterlite, however, said it remained in the race.
Sterlite, in a court document submitted on Monday, also offered to spare Grupo Mexico SAB de CV from a potential legal liability of nearly $8 billion if it gets control of bankrupt Asarco.
Sterlite said if the federal court approves its plan to acquire Asarco, it would not hold Grupo Mexico liable for more than about $900 million of liability related to the 2003 transfer of a Peruvian mine.
Grupo Mexico has been desperate to regain control of Asarco in its bid to avoid penalty for the "fraudulent transfer" of Asarco's stake in Peruvian miner Southern Copper Corp.