Grupo Mexico regains control of US copper mine Asarco, after Sterlite loses legal battle
10 Dec 2009
South American mining giant Grupo Mexico today said it has regained control of US copper mine Asarco after it won an year-long legal battle with Vedanta group firm Sterlite for acquiring the bankrupt company.
US district judge Andrew Hanen in Brownsville, Texas ruled in favour of Grupo Mexico's $2.5 billion reorganisation plan for Asarco, saying it "is both feasible and confirmable," and rejected a competing offer from Sterlite Industries (India) Ltd. (See: Sterlite trumps Grupo Mexico with a $2.565 billion bid for Ascaro).
A lower court that oversaw Asarco's case for five years, had ruled in favor of Grupo Mexico.
Like Grupo Mexico, Sterlite had also offered to spend over $2.5 billion to reorganise Asarco and make payments to Asarco's creditors, but the judge found more cash in Grupo Mexico's offer, which, he said, could help pay creditors in full.
Under the reorganisation plans, Manuel Ramos, currently Asarco's vice president of metallurgical operations, will become chief executive and treasurer Oscar Gonzalez Barron will become chief financial officer.
Asarco has approximately 1,500 unionised workers and about 1,000 nonunion employees. Hanen has asked Grupo Mexico to make a comprehensive contract proposal to the union by 15 January.