Bankruptcy Judge Backs Grupo Mexico Bid For Asarco

SANDY SHORE

DENVER (AP) — A bankruptcy judge has recommended that Grupo Mexico be allowed to regain control over copper miner Asarco LLC, saying its $2.2 billion bid is more likely to fully repay creditors than that of rival suitor Sterlite Industries.

U.S. Bankruptcy Judge Richard Schmidt in Corpus Christi, Texas, issued the finding late Monday over objections from Asarco, its employees and some creditors who believed India-based Sterlite's $2.1 billion bid was the best way for the Tucson, Ariz.-based company to emerge from four-year Chapter 11 bankruptcy proceedings.

The outcome involves Asarco's three Arizona mining operations and a Texas refinery that were placed in bankruptcy protection in August 2005 when the company ran out of cash and faced hefty environmental liability and potential asbestos-related claims. Mexico City-based Grupo Mexico lost control of Asarco shortly after the company filed for Chapter 11 when independent directors were placed on the board.

Asarco spurned Grupo's advances to reacquire the company when it accepted Sterlite's initial $2.6 billion buyout offer last year. But after copper prices plunged in the wake of the market meltdown, Sterlite backed out of the deal in October 2008, saying it wouldn't close the sale unless Asarco agreed to a price reduction. The acquisition price dropped to $1.7 billion but Sterlite steadily sweetened the pot in an effort to win the battle with Grupo Mexico.