Sterlite loses Asarco as US judge rules in favour of Grupo Mexico
16 November 2009
Bringing the long battle for the bankrupt US copper miner Asarco LLC closer to an end, Texas district court ruled Friday in favour of Mexican mining giant Grupo Mexico SA de CV (GMexico) over its Indian rival Sterlite Industries Ltd (Sterlite), a unit of London-based Vedanta Resources Plc.
The district judge Andrew Hanen in Brownsville affirming the August ruling of bankruptcy court ordered Grupo Mexico to make a comprehensive proposal to Asarco's workers union to pave the way to exit bankruptcy.
Judge Hanen wrote in his ruling: ''This case is now in its fifth year of bankruptcy proceedings. While the path has not necessarily been as expedient or as unerring as some would have preferred, it has led all concerned to a point where the end, barring appeals, is now in sight."
"In many ways, the course of this bankruptcy has been a contentious and hard-fought piece of litigation. In other ways, this proceeding can be labeled as one of the most successful bankruptcy proceedings in recent history." The judge further stated.
Tucson, Arizona-based Asarco is the third-largest copper producer in the US, operating three copper mines and a smelter and owns 5 million tonnes of copper resources. The company was acquired by GMexico in 1999 for $2.2 billion. Crippled by its huge debt burden and hefty environmental liabilities and asbestos-related claims, Asarco was filed for bankruptcy protection in 2005. Subsequently, GMexico lost control of the miner, which employs around 2,500 people.
Earlier in August, US bankruptcy judge Richard Schmidt recommended the district court to approve GMexico's $2.48 billion offer. Conversely, Asarco's union and the court-appointed management favoured India's Sterlite bid of $2.57 billion. (See: Sterlite trumps Grupo Mexico with a $2.565 billion bid for Ascaro)