Sterlite sweetens offer price for Asarco assets

August 12, 2009: The battle for US copper mining firm Asarco is expected to be over by the end of this month with the bidders, Sterlite Industries and Grupo Mexico, revising their offers.

Sterlite Industries announced that it had revised its bid for acquiring the assets of Asarco, which is attempting to emerge from court-supervised bankruptcy, for a cash payment of $1.58 billion and a deferred payment of $208 million through participatory notes after its rival sweetened its offer by increasing the cash portion by $260 million and revised the total value of its bid to $2 billion. Earlier, Sterlite, a part of London-listed Vedanta, had offered to pay $1.1 billion in cash and $770 million by way of participatory notes.

A person at Sterlite told: "The consideration was changed to reflect a rise in copper prices and to meet the expectations of creditors." Asarco's creditors will choose from these two offers next week and will then approach the US bankruptcy court for its nod. The successful bid needs to be supported by three-fourths of creditors. Asarco is undergoing a Chapter 11 bankruptcy proceeding, under which a company enjoys some protection from its creditors, while it tries to restructure under court supervision.

Sterlite chairman Anil Agarwal had said that the acquisition was in line with the Vedanta's "strategy of leveraging its existing skills to become a diversified global copper producer and creating long-term value for shareholders." Vedanta, in addition to its Indian assets, has equity ownership in Zambia's Konkola Copper Mines.

Source: The Economic Times