*Grupo Mexico files reorganization plan for Asarco
*Grupo offers $1.6 billion
*Grupo says has support of asbestos creditors
By Emily Chasan
NEW YORK, May 15 A Grupo Mexico SAB de CV(GMEXICOB.MX) unit on Friday formalized its $1.55 billion offer for bankrupt U.S. copper miner Asarco LLC by filing its own proposal for Asarco's reorganization in a Texas court.
Grupo Mexico, which acquired Asarco in a leveraged buyout in 1999, but lacks board control of the company due to the bankruptcy, is competing against a $1.7 billion offer from India's Sterlite Industries STRL.BO.
Both potential buyers have now filed their own reorganization plans with the bankruptcy court.
Grupo Mexico said it is offering $1.3 billion in cash and a $250 million fully committed loan to regain control of Asarco. Sterlite's offer is for $1.1 billion in cash and and about $600 million of senior secured notes, payable over nine years.
"We look forward to the Court's decision in this process and to regaining control of our subsidiary," Alberto de la Parra, General Counsel of Grupo Mexico said in a statement.
Asarco, which owns three copper mines in Arizona, filed for bankruptcy protection in 2005, after it was sued for more than $1 billion due to environmental clean-up and asbestos claims.
Grupo Mexico said its proposed reorganization plan has "the full support" of Asarco's asbestos creditors, which the Sterlite deal does not. The Sterlite deal has been supported by other parties in the case, and the company has proposed the Sterlite-sponsored reorganization plan as its own.
Sterlite, a unit of London-listed Vedanta Resources Plc (VED.L), had renegotiated an earlier $2.6 billion offer for Asarco. Sterlite backed out of that deal in October, saying it would need a substantial reduction in price after a drop in the copper markets.
Asarco received court approval last month to grant Sterlite certain bid protections for its offer, including a break-up fee and expense reimbursement if its deal does not go through. [ID:nN22274894]
Grupo Mexico filed papers to appeal that decision on Thursday. [ID:nBNG472799]
The case is In re: Asarco LLC, U.S. Bankruptcy Court, Southern District of Texas, No. 05-21207. (Reporting by Emily Chasan)