US bankruptcy judge backs Grupo Mexico's bid for Ascaro
01 Sep 2009
A US bankruptcy judge has recommended that Grupo Mexico, the original owner of Asarco LLC, be allowed to regain control of the copper miner as its $2.2 billion bid has more cash element to repay creditors than the $2.1 billion offer of rival suitor Sterlite Industries.
The judge's recommendations supports Grupo Mexico's attempts to regain control of the Tucson-based copper producer to the disappointment of Sterlite Industries, and the current management of Ascaro.
The Ascaro management is against Grupo Mexico regaining control of the company while it supports a competing proposal by India-based Sterlite Industries.
The Grupo Mexico offer "is more likely to pay creditors in full in that it is funded with sufficient cash to pay creditors in full at confirmation," judge Richard Schmidt of Corpus Christi, Texas, observed, adding that it was the best way for Ascaro to emerge from bankruptcy protection proceedings.
The judge also pointed out that Sterlite's plan, though overwhelmingly preferred by creditors, relies on the company recovering money from a legal judgment related to the bankruptcy. (See: Sterlite raises Asarco offer to $2.1 billion)
After a series of amendments of rival offers, Grupo Mexico's bid now stands at around $2.48 billion while Sterlite's bid adds up to about $2.17 billion.