CHICAGO Nov 14 A federal judge has issued a
ruling supporting a nearly $2.5 billion bid by Grupo Mexico
(GMEXICOB.MX), the country's largest mining company, for Asarco
LLC, paving the way for the U.S. copper miner to exit
Judge Andrew Hanen of the U.S. District Court in
Brownsville, Texas, said in a decision issued late on Friday
that Grupo's plan was feasible and more likely to close than a
sale of Asarco to India's Sterlite Industries Ltd. STRL.BO
"This case is now in its fifth year of bankruptcy
proceedings. While the path has not necessarily been as
expedient or as unerring as some would have preferred, it has
led all concerned to a point where the end, barring appeals, is
now in sight," Hanen wrote in a 141-page page ruling.
"In many ways, the course of this bankruptcy has been a
contentious and hard-fought piece of litigation," he added. "In
other ways, this proceeding can be labeled as one of the most
successful bankruptcy proceedings in recent history."
Asarco, based in Tucson, Arizona, filed for bankruptcy
protection in 2005 amid a strike and more than $1 billion of
asbestos and environmental claims. The miner and its union had
favored a $2.565 billion bid by India's Sterlite.
However, U.S. Bankruptcy Judge Richard Schmidt in Corpus
Christi, Texas had twice recommended the Texas district court
approve Grupo Mexico SAB de CV's $2.4799 billion bid.
The district court is deciding the final winner due to
certain agreements related to the company's asbestos
Grupo Mexico acquired Asarco in a leveraged buyout in 1999,
but lacks board control due to the bankruptcy. Grupo Mexico had
argued it still owned Asarco's equity and could not be forced
to sell the assets.
An attorney for Grupo previously said if the judge ruled in
favor of Grupo, the company would be required to close the deal
in 30 days and Asarco could be out of bankruptcy by Dec. 31.
On Friday Hanen said it was unlikely that Asarco's
unionized workers would go on strike, a day after Grupo said
the reorganized Asarco would assume the union's existing
contract once its plan is confirmed.
Sterlite had made numerous attempts to sweeten its offer
for Asarco. As part of its latest offer it said it would let
Grupo Mexico out of an $8 billion potential legal liability
stemming from the 2003 transfer of Asarco's stake in Peruvian
miner Southern Copper Corp PCU.N. But Judge Schmidt had said
that offer was too late.
The cases are In re: Asarco LLC, U.S. Bankruptcy Court,
Southern District of Texas, No. 05-21207 and In re: Asarco LLC,
U.S. District Court, Southern District of Texas, No. 09-00177.
(Reporting by Ben Klayman; Editing by Xavier Briand)