|
| Sterlite hikes cash component of Asarco offer to $2.1 bn |
| Press Trust of India / Mumbai Aug 20, 2009, 14:42 IST |
|
Vedanta group firm Sterlite Industries today said it has increased the cash component of its offer for acquiring US-based bankrupt copper miner Asarco by $500 million to nearly $2.1 billion.
The revised offer has now almost matched that of its rival Grupo Mexico's cash component. Grupo Mexico has reportedly offered a cash component of $2.2 billion in its bid to regain control over the target company.
Sterlite Industries has also proposed to support a plan of reorganisation, according to which, it has pledged to pay all of Asarco's unsecured debts in full, the company said in a filing to the Bombay Stock Exchange (BSE).
However, the deferred payment in notes of Sterlites' bid would remain unchanged.
"The 9-year Copper Price Participation Note of $207.9 million and the Put Option granted to the Asbestos Creditors against their share of 27 per cent litigation interest remains unchanged," the company said.
This is for the second time in less than 10 days that Sterlite has increased the cash component for the bankrupt US miner. Earlier on August 11, NRI billionaire Anil Agarwal-led company had hiked this part of the offer to $1.58 billion, citing an increase in copper prices.
While there is an increase in the cash consideration, "Sterlite will receive approximately 72.5 per cent interest in the Litigation Trust to be set up by the Debtor in Possession (Asarco LLC) at closing of the transaction to pursue a judgement against Americas Mining Corporation awarded by the US District Court of Texas, Brownsville Division," the filing said.
All the other terms and conditions of the agreement remain unchanged, the company added.
Shares of Sterlite Industries soared as much as 2.43 per cent in morning trade to touch its day's high of Rs 625.40. It was later trading at Rs 620.20, up 1.58 per cent on the BSE.
Today's increase in Sterlite's offer comes at a time when a bankruptcy court in Texas, USA, is taking a final view of the two competing bids. The court is expected to handle the control of Asarco to one of the two firms soon. Vedanta had earlier said it hoped to acquire Asarco by August-end.
Earlier on August 11, NRI billionaire Anil Agarwal-led company had hiked the cash part of the offer to $1.58 billion, citing an increase in copper prices.
After going down to a level of $3,500 a tonne, copper prices have recovered on the back of improvement in demand and are now hovering at about $6,000 per tonne-level.
US-based Harbinger Capital, which was also in the race to acquire Asarco, has already withdrawn its $500 million offer and is reported to be supporting Sterlite's bid.
Vedanta has already claimed that its bid for Asarco is being backed by the US government and the trade union.
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 bankrupt firm had total revenues of $1.9 billion and pre-tax profit of $393 million for the year-ended December 31, 2008.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
Content Guide
