U.S. judge approves break-up fee for Asarco bidder
HOUSTON (Reuters) - A U.S. bankruptcy judge has approved a break-up fee and other protections sought by India's top non-ferrous metal producer, Sterlite Industries Ltd, in its $2.6 billion bid for bankrupt copper miner Asarco LLC, according to court documents.
Judge Richard Schmidt also said on Tuesday that Asarco parent Grupo Mexico could put forward its own bankruptcy reorganization plan for the subsidiary it lost board control over when Asarco filed for bankruptcy nearly three years ago.
Schmidt's ruling during a hearing in Corpus Christi, Texas, will allow Sterlite and Grupo Mexico to compete against one another to resolve the bankruptcy that began in 2005 when Asarco was sued for $1 billion over environmental cleanup and asbestos claims.
After the ruling, Schmidt vowed to win back control of Asarco in the competition.
"Although we disagree with the court's ruling in granting bid protections to Sterlite Industries and we intend to appeal that decision, we are gratified that the court also recognized that we should have the right to file our own reorganization plan and we are confident that our plan will ultimately be confirmed by the bankruptcy court," Grupo Mexico said in a statement.
Sterlite, an affiliate of London-listed Vedanta Resources Plc, has proposed a straight purchase of Asarco's assets for $2.6 billion.
Sterlite was the winning bidder at an auction of the assets on May 30. It needed an agreement on the protections by Wednesday before it would go forward with negotiating a deal, which must be reached by the end of the year.
The break-up fee could be triggered by the acceptance of a rival bid by the Asarco board.
For its part, Grupo Mexico, instead of purchasing assets it already owns, has proposed providing as much as $4.14 billion to pay off environmental and asbestos claims against Asarco. Continued...
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