New York: Mining giant Grupo Mexico on Thursday said it has regained control over bankrupt copper miner Asarco after winning a year-long legal battle with Vedanta group firm Sterlite Industries for acquiring the ailing company.
"Grupo Mexico announced today that its subsidiary, Americas Mining Corp, has consummated its bankruptcy plan for Asarco LLC, reuniting Asarco with its parent company," the South American company said in a statement.
The reunion follows the last month's ruling of a US district court favouring Grupo Mexico's about USD 2.4 billion bid over that of Sterlite Industries' USD 2.5 billion offer for acquiring the US-based company.
"The reintegration follows US district court Judge Andrew S Hanen's decision last month to approve GMexico's full payment reorganisation plan for Asarco, concluding the company's four-year Chapter 11 proceeding," it said.
Grupo Mexico had acquired Asarco in 1999 but lost control of the subsidiary due to bankruptcy in 2005 amid a workers strike and over a billion-dollar environment and asbestos claims.
Its final bid was first approved by a Texas-based Bankruptcy Court and later the District Court confirmed the same.
As per its Asarco-reorganisation plan, Grupo Mexico's arm
AMC would pay USD 2.2 billion in cash to Asarco's creditors,
besides guaranteeing a one-year USD 280 million note payable
to Asarco's asbestos creditors.
Grupo Mexico said it has tied finance to fund the
reorganisation plan. "To finance the plan, a syndicate of
internationally recognised financial institutions has provided
USD 1.5 billion in financing to AMC. GMexico contributed an
additional USD 700 million to fund the USD 2.2 billion cash
contribution."
Commenting on the completion of the court-approved plan,
Asarco Vice-President and General Counsel Jorge Lazalde said,
"With ASARCO now able to operate free of its burdensome
asbestos and environmental liabilities, which will be fully
satisfied under our plan, we believe the combined entity will
create one of the world’s strongest and most competitive
copper producers."
PTI
First Published: Thursday, December 10, 2009, 16:23