Vedanta push for Asarco hits bump in US courtJune 14th, 2008 - 9:22 pm ICT by IANS
New York, June 14 (IANS) Vedanta Resources’ takeover bid of US copper mining giant Asarco hit a bump Friday when a judge of a bankruptcy court in Texas signalled he might give Grupo Mexico SA, Asarco’s estranged corporate parent, one last chance to resume control of its US subsidiary. Judge Richard Schmidt asked why Grupo Mexico should not have the opportunity to file a plan to take the century-old American Smelting and Refining Co (Asarco) out of bankruptcy. While bidding, the Mexican company had promised to pay all creditors in full and take out of bankruptcy the mining company based in Tucson, Arizona.
London-based Vedanta’s subsidiary Sterlite Industries (India) has offered $2.6 billion to buy the operating assets of Asarco. But on Thursday, the Mexican firm proposed to recapitalise Asarco at $4.1 billion, part of that amount coming from Asarco’s own assets, with the rest as a cash infusion from Grupo Mexico.
The Mexican company has argued that auctioning Asarco’s assets, and applying any proceeds to settle outstanding claims, is unfair because it ignores the true value of what creditors are owed, assigning restitution based on what a bidder is offering, not actual liabilities.
Asarco has faced an unknown amount of liability from environmental claims because of a century of mining across the western US. Grupo Mexico has said one reason Asarco chose bankruptcy was to allow determining of claims against the company once and for all. Auctioning assets to Vedanta subverts that process, they said.
Asarco’s attorney has rejected that argument on the grounds that there are “execution risks” to Grupo Mexico’s plan, while Vedanta is ready to close the deal.
Vedanta’s takeover of Asarco has also been objected to by two Arizona Congressmen who expressed concerns about the metals and mining major’s environment track record.
Gabrielle Giffords and Raul Grijalva sent a letter Wednesday to US Attorney General Michael Mukasey, urging the Department of Justice to investigate Vedanta’s environmental record before allowing the deal to proceed.
- Sterlite revises bid amount for Asarco - Sep 11, 2009
- Sterlite hikes offer for US-based Asarco - Aug 20, 2009
- Two US Congressmen object to Vedanta's Asarco takeover - Jun 12, 2008
- Prospective buyer for Mexican airline puts money on table - Nov 19, 2011
- Lehman exits bankruptcy - Mar 07, 2012
- Vedanta looking to acquire coal assets in India and overseas - Feb 26, 2012
- Sterlite to buy US copper mining firm for $1.7 bn - Mar 07, 2009
- Mexican group sells South American hotels for $275 mn - Jul 17, 2012
- U.S. announces $773M settlement with GM to resolve environmental liabilities - Oct 20, 2010
- Sterlite Industries buys US copper major Asarco - May 31, 2008
- Sex.com Goes Bankrupt, Creditors Interrupt Auction - Mar 21, 2010
- Three green groups seek review of Vedanta's Asarco deal - Jun 18, 2008
- Vedanta's new buy shows India Inc's growing reach: WSJ - Jun 02, 2008
- Nissan, Daimler eye joint plant in Mexico - Nov 17, 2011
- Vedanta to consolidate subsidiaries into single entity - Feb 25, 2012
Tags: all creditors, asarco, bankruptcy court, cash infusion, copper mining, environmental claims, gabrielle giffords, grupo mexico, industries india, last chance, mining company, operating assets, raul grijalva, restitution, richard schmidt, takeover bid, true value, tucson arizona, us attorney general, vedanta resources