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| Grupo Mexico's $1.6 bn bid rivals Vedanta's offer for Asarco |
| Press Trust of India / New York May 20, 2009, 18:04 IST |
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Competing with Vedanta Resources, Grupo Mexico has come up with a $1.6 billion reorganisation programme for regaining control of its bankrupt firm Asarco.
Americas Mining Corporation (AMC), the Grupo Mexico arm, which wholly owns Asarco, presented the plan of reorganisation for the firm last week at a bankruptcy court in Texas.
In its reorganisation plan AMC has offered $1.6 billion with a cash component of $1.3 billion, Grupo Mexico said in a statement.
Grupo Mexico claimed that its bid is superior to the $1.7-billion offer of Vedanta Group firm Sterlite Industries whose bid had a cash component aof $1.1 billion.
AMC said the plan has been endorsed by the creditors of Asarco.
After creditors of the firm give their approval to one of the competing plans to acquire Asarco, the bankruptcy court has to take the final call and award the controlling rights of the firm.
Sterlite, the Indian subsidiary of London-listed Vedanta Resources, has been negotiating the Asarco deal since last year. It had initially offered $2.6 billion for buying the assets of the ailing company, which has been bankrupt for over four years now.
However, with devaluation of mining assets and falling copper prices amid the global economic downturn, Sterlite wanted to settle the deal at a lower price and revised down its bid to $2.1 billion last year and then later to the present offer of $1.7 billion.
Sterlite is looking to acquire Asarco's three open-pit copper mines and associated mills and SX-EW in Arizona; a copper smelter in Arizona; a copper refinery, rod and cake plants, and a precious metals plant in Texas, the US.
Asarco, formerly known as American Smelting and Refining Company, is a 110-year-old firm and had filed for bankruptcy protection in 2005 after being sued for $1 billion over environmental issues.
The company sold about 2.37 lakh tonnes of refined copper last year. At present, the company's mines have an estimated copper reserves of 5 million tonnes.
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