US company says it is in discussions with multiple parties.
Sterlite’s revised offer to acquire Asarco may see fresh rival bids as the valuation of the bankrupt US copper miner fell in line with the commodity prices. “We are in hot and heavy discussions with multiple parties on multiple plans,” Asarco attorney Jack Kinzie told the bankruptcy court.
The attorney said the company is also negotiating with Sterlite even though Asarco had recently terminated the offer of the Indian miner, when Sterlite said it couldn't close without a significant reduction in price.
The Vedanta group’s flagship firm had recently submitted a revised bid, which is believed to be $500 million less than its earlier offer of $2.6 billion, citing drop in the metal prices and financial crunch.
“A slew of metal firms from the US and Europe are negotiating with Asarco. However, Sterlite Industries continues to be the favourite of workers’ union and legislators,” said informed sources. A Sterlite spokesperson declined to comment on the development. With the declining price of copper, Asarco turned unprofitable in October with a $10.7 million net loss in the operating report for the month, Bloomberg reported.
Sales were $106.7 million, and the operating loss was $21.4 million. The price of copper is down 44 per cent this year.
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Asarco, which operates three large copper mines, had filed for bankruptcy protection amid asbestos lawsuits in 2005. Grupo Mexico owns 100 per cent of the company's equity but has lost control of the board because of the bankruptcy filing. The case is in the US Bankruptcy Court at the southern district of Texas. Judge Richard Schmidt set January 13 as a hearing date to revisit the issue of the company's bankruptcy emergence plan.
On May 31, Sterlite emerged as the lead bidder with $2.6 billion offer to buy Asarco’s operating assets. But Grupo, which has vowed to fight the Sterlite’s Asarco purchase, had proposed a $4.1 billion revival package. Opponents, including members of United Steel Workers, a trade union in the US, have lined up to bash Grupo, controlled by Mexico’s third-richest man German Larrea, and picketed Asarco’s mines around Southern Arizona. Sterlite had in October decided to cancel the earlier offer, citing steep fall in copper prices. Soon after, the US firm’s estranged parent Grupo Mexico pulled out of its counter bid.