Sterlite close to Asarco buy

Sterlite Industries, the country's largest copper producer, is close to signing a contract to buy Asarco LLC, potentially ending the US miner's four-year-old bankruptcy, two people involved in the talks said.

The companies have agreed on a dollar value for the sale of Asarco's assets and other major points of a proposed contract, said the people, who declined to be identified because they aren't authorised to speak on the subject. The contract may be signed within two weeks, they said yesterday.

Sterlite would pay less than the $2.6 billion it had offered for Tucson, Arizona-based Asarco last year before copper prices declined. The original sale was the centrepiece of the plan by Asarco's managers to reorganise the company, pay creditors most of what they are owed and allow the miner to leave court supervision intact after four years in bankruptcy.

Asarco's parent, Grupo Mexico SAB, would benefit from the sale "as long as the company is bought in full, and all the liabilities are cancelled in full," said Rodrigo Heredia, an analyst with Ixe Casa de Bolsa SA in Mexico City. A sale may end Grupo Mexico's exposure to any asbestos lawsuits against Asarco, Heredia said. Sterlite Spokesman Sumanth Cidambi declined to comment today in Mumbai.

The company's shares fell 2.8 per cent to Rs 271.4 in Mumbai trading. The stock gained 6 per cent last month. Last week, Grupo Mexico's attorney, Jorge Lazalde, said Asarco's creditors should expect only "cents on the dollar" for their claims.

Mumbai-based Sterlite pulled out of the original sale in October saying changes in the copper market no longer justified the price. Copper has plunged 64 per cent from a May 5 high of $4.2605 a pound on the Comex division of the NYME.