Sterlite to get $52 mn if Asarco bid fails
Billionaire Anil Agarwal-led Indian metal major Sterlite will get a break-up fee of $ 52 million (over Rs 200 crore) if its proposed acquisition of US mining firm Asarco falls apart, a bankruptcy court has ruled.
By PTI |
NEW YORK: Billionaire Anil Agarwal-led Indian metal major Sterlite will get a break-up fee of $ 52 million (over Rs 200 crore) if its proposed acquisition of US mining firm Asarco falls apart, a bankruptcy court has ruled.
Sterlite Industries, part of London-listed Vedanta group, had announced on May 31 acquisition of all operating assets of bankrupt copper miner Asarco for $ 2.6 billion in cash.
However, Asarco's parent company, Mexican mining giant Grupo Mexico SA, has said it intends to file its own reorganisation plan for the bankrupt company, which came as a roadblock to Sterlite's bid.
A Wall Street Journal report said today that a bankruptcy court on Tuesday gave Grupo Mexico permission to file a reorganisation plan for Asarco, from which the Mexican company has been barred so far.
Besides, the court has also approved a breakup fee of 52 million dollars to Vedanta if Asarco were to endorse Grupo Mexico's plan, the report said, adding that the Mexican firm's attorneys view this as an "inappropriate deterrent and say they will appeal that element of ruling."
The court ruling is being seen as leading to a bidding war between Sterlite and Grupo Mexico to resolve the bankruptcy case that began in 2005 after Asarco being sued for over a billion dollar in environmental and asbestos claims.
Sterlite had signed the deal to acquire Asarco after an auction between various bidders, that began in late April and the winner was selected on May 23. The selection process followed a procedure supported by Asarco's creditors and approved by the US Bankruptcy Court.
Besides, an independent court-appointed examiner also observed the bidding process, Sterlite had said on May 31 after clinching the deal.
Sterlite Industries, part of London-listed Vedanta group, had announced on May 31 acquisition of all operating assets of bankrupt copper miner Asarco for $ 2.6 billion in cash.
However, Asarco's parent company, Mexican mining giant Grupo Mexico SA, has said it intends to file its own reorganisation plan for the bankrupt company, which came as a roadblock to Sterlite's bid.
A Wall Street Journal report said today that a bankruptcy court on Tuesday gave Grupo Mexico permission to file a reorganisation plan for Asarco, from which the Mexican company has been barred so far.
Besides, the court has also approved a breakup fee of 52 million dollars to Vedanta if Asarco were to endorse Grupo Mexico's plan, the report said, adding that the Mexican firm's attorneys view this as an "inappropriate deterrent and say they will appeal that element of ruling."
The court ruling is being seen as leading to a bidding war between Sterlite and Grupo Mexico to resolve the bankruptcy case that began in 2005 after Asarco being sued for over a billion dollar in environmental and asbestos claims.
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Sterlite had signed the deal to acquire Asarco after an auction between various bidders, that began in late April and the winner was selected on May 23. The selection process followed a procedure supported by Asarco's creditors and approved by the US Bankruptcy Court.
Besides, an independent court-appointed examiner also observed the bidding process, Sterlite had said on May 31 after clinching the deal.
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