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 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 $2.4 billion bid over that of Sterlite Industries’ $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 $2.2 billion in cash to Asarco’s creditors, besides guaranteeing a one-year $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 $1.5 billion in financing to AMC. GMexico contributed an additional $700 million to fund the $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.”