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Sterlite may face $2.6 bn suit if Asarco bid fails

Sterlite may face $2.6 bn suit if Asarco bid fails
PTI
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First Published: Mon, May 04 2009. 07 05 PM IST
Updated: Mon, May 04 2009. 07 05 PM IST
New York: NRI billionaire Anil Agarwal-led Sterlite Industries faces a potential $2.6 billion lawsuit if it loses out in the race to acquire US copper producer Asarco to the target firm’s parent company Grupo Mexico.
Asarco’s independent Board and Sterlite sought the approval of certain conditions under which Asarco would grant a release from the potential $2.6 billion lawsuit to be brought against Sterlite for having breached the original purchase agreement to buy Asarco’s assets.
However, Judge Schmidt (of bankruptcy court) ruled that such release will not take effect if it is the Grupo Mexico Reorganization Plan the one that is eventually confirmed and approved, in which case Asarco, under the control of Grupo Mexico, would be able to pursue the aforementioned suit against Sterlite, Grupo Mexico said.
The bankruptcy court of Texas in the US has given initial nod to Sterlite Industries’ $1.7 billion bid to acquire Asarco, of which cash forms $1.1 billion. This has been rivalled by Grupo Mexico’s all cash $1.3 billion offer.
Both the parties can hike the bid if the need be in their respective reorganization plans for Asarco.
Calls and messages sent to Vedanta officials remained unanswered till the filing of the report.
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First Published: Mon, May 04 2009. 07 05 PM IST