Small Town News

Sterlite offers $2,565 billion in increased bid for Asarco

---

Sterlite (USA), Inc. objected last week to the bankruptcy court's recommendations for Asarco LLC's reorganization. Included in the objection was a modified plan increasing their cash offer for Asarco to $2,565 billion.

U.S. Bankruptcy Judge Richard Schmidt's recommendation, released on August 31st, favored Grupo Mexico SAB's plan over Sterlite's. Gru-po, parent of Asarco when it entered bankruptcy, proposed a plan worth $2.48 billion.

Sterlite differed with the recommendation on three points.

First, Sterlite disagreed with Schmidt's decision that Grupo's offer was larger and had a higher cash payment. In their objection, Sterlite said that the bankruptcy court was incorrect in assuming that Grupo's offer was larger.

They also said that the court was misleading in saying that Grupo's plan offered more cash. But that in any event, with the new price offered by Sterlite, those issues were no longer true.

Second, Sterlite said that Schmidt ignored the preference of creditors. Their plan, Sterlite's objection said, "was preferred by every major creditor group that expressed a preference."

Third, Sterlite said that Grupo's plan was inferior because they had failed to negotiate an agreement with the union as outlined in the special successorship clause.

The United Steelworkers (the Union), which represents roughly 1400 Asarco employees, also preferred the Sterlite plan. Their collective bargaining agreement, reached with Asarco in 2007, included the special successorship clause. Under the clause, whoever gains control of the company must negotiate an agreement with the Union.

Sterlite negotiated such an agreement in 2008. In its objection, also filed last week, the Union said that they sent a proposal to Grupo in July 2009 but Grupo has not responded.

Will Sterlite's increased offer make a difference? That decision is expected this fall. The case is currently awaiting judgment by U.S. District Judge Andrew Hanen.



Copyright 2009 The Superior Sun, Superior, Arizona. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from SmallTownPapers, Inc.

© 2009 The Superior Sun Superior, Nebraska. All Rights Reserved. This content, including derivations, may not be stored or distributed in any manner, disseminated, published, broadcast, rewritten or reproduced without express, written consent from DAS.

More from The Superior Sun