* Asarco sues Sterlite for backing out of 2008 deal
* Sterlite had offered $2.6 billion for Asarco
* Asarco says Sterlite breached its contract (Updates with Sterlite lawyer, background)
By Emily Chasan
NEW YORK, March 19 (Reuters) - U.S. copper miner Asarco LLC said on Friday it has filed a lawsuit against one-time suitor Sterlite Industries Ltd STRL.BO, after the Indian resources company backed out of a $2.6 billion deal to take Asarco out of bankruptcy in 2008.
Asarco, which exited bankruptcy in December 2009 under the control of Mexican miner Grupo Mexico SAB de CV (GMEXICOB.MX), said in a March 17 lawsuit that Sterlite had breached its purchase and sale agreement with the miner and forced it to spend more on attorneys fees, marketing, and other costs.
Sterlite, based in Mumbai, had bid $2.6 billion for Asarco in May 2008 and was chosen by the Asarco management to sponsor the company’s bankruptcy exit. It would have been among the largest Indian cross-border deals, but in October 2008, Sterlite withdrew that offer, saying it needed a substantial reduction in price after copper markets dropped.
That touched off a battle with Grupo Mexico, which had first acquired Asarco in a leveraged buyout in 1999, and was seeking to regain control of the subsidiary post-bankruptcy.
Asarco, based in Tuscon, Arizona, filed for bankruptcy protection in 2005 as it faced a workers’ strike and more than $1 billion of asbestos and environmental claims.
An attorney for Sterlite declined to comment on the litigation on Friday.
Even though Asarco emerged from bankruptcy in December, its contentious sale process is still being played out in the U.S. courts.
Sterlite, a unit of London-listed Vedanta Resources PLC (VED.L), is appealing a judge’s decision approving the sale to Grupo Mexico, and is seeking reimbursement of its expenses in other matters pending before the bankruptcy court.
After the initial deal with Sterlite failed, both Grupo Mexico and Sterlite entered another round of bidding with lower offers. Grupo Mexico eventually paid about $2.5 billion to regain control of Asarco and repay Asarco’s creditors in full.
The case is Asarco LLC vs. Sterlite (USA), Inc et al, U.S. Bankruptcy Court, Southern District of Texas, No. 10-02010. (Reporting by Emily Chasan; Editing by Richard Chang, Leslie Gevirtz)