Asarco LLC's plan to exit Chapter 11 appears to have fallen apart, now
that the $2.6 billion cash sale to Sterlite (USA) Inc. that its plan
hinged on has unraveled. Could this mean that Asarco's nonbankrupt
parent Grupo México SAB de CV's plan, which calls for a $2.7 billion
cash payment plus another guaranteed $440 million payout, may have a
leg-up at the Nov. 17 confirmation hearing?
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The bankrupt copper miner's next move -- a backup plan to reorganize
via Chapter 11 instead of making a sale, perhaps? -- may be revealed at
the upcoming Oct. 30 and Oct. 31 mediation hearing, if not before.
Sterlite, which has said that it wants a price reduction or it won't
close on the sale, will be attending the hearing. So will Grupo Mexico,
with whom Asarco has a very strained relationship.
However, there may be yet another twist in this already complicated three-year bankruptcy, namely that Grupo Mexico is said to be re-evaluating its offer in light of Sterlite dropping out of the sale.
With so much up in the air, it's not surprising that Judge Richard
Schmidt of the U.S. Bankruptcy Court for the Southern District of Texas
in Corpus Christi has suspended the solicitation procedures for both
plans of reorganization. (Interestingly enough, Judge Marvin Isgur of
the Corpus Christi court will be presiding at the mediation hearing.)
Hopefully creditors will get a clearer sense of what lies ahead as that
mediation hearing looms. - Jamie Mason
