Grupo Mexico offers $2.2B in cash for bankrupt Arizona mining company Asarco LLC

Grupo Mexico raises cash offer for Asarco to $2.2B

DENVER — A Mexican mining company raised its offer for Asarco LLC to $2.2 billion in cash Monday in an attempt to wrest control of the bankrupt Arizona mining company from a rival bidder in India.

The latest offer would provide full funding for Asarco’s creditors, which Grupo Mexico SAB said would eliminate the need for their votes on whether to accept its bid or that of India’s Sterlite Industries Ltd.

Grupo Mexico’s bid, which also comes with a $280 million one-year note, excludes creditors involved in an asbestos suit against Asarco, Grupo Mexico SAB attorney Robert Moore told The Associated Press.

The latest offer was made during a two-week hearing in U.S. Bankruptcy Court in Corpus Christie, Texas. A judge there will determine whether the Mexican mining giant or Sterlite will be given the right to shepherd Asarco out of bankruptcy, bringing the 4-year-old case closer to an end.

The judge is scheduled to make a recommendation by the end of August.

Last week, the hearing began with Sterlite Industries upping its bid for the company to $1.6 billion in cash and a note.

Grupo Mexico bought Asarco in 1999. It then formed two subsidiaries, one for Asarco and one for itself. Grupo Mexico then had Asarco transfer its majority ownership in miner Southern Peru Holdings from the Asarco subsidiary, to the Grupo Mexico subsidiary.

Asarco filed suit, saying that Grupo Mexico’s spinoff of the valuable Peruvian assets left the company with mounting debt and a shortage of cash, one factor that led to its bankruptcy filing in 2005.

Earlier this year, a U.S. district judge ordered Grupo Mexico’s subsidiary to return stock in Southern Peru to Asarco, which company officials said was valued at more than $6 billion.

The same judge ruled that Grupo Mexico’s Americas Mining Corp. was liable for a fraudulent transfer in the 2003 sale of Southern Peru Holdings LLC stock.

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