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 The bankruptcy case of Asarco LLC is still a mess. There have been
several news reports recently stating that both Grupo Mexico SAB de CV and
Sterlite (USA), a subsidiary of Sterlite Industries (India) Ltd., are
still interested in acquiring the bankrupt smelter and mining company.If they do, one thing's clear: They'll offer something lower than they did originally.
But the depth of what they may offer sounds a little nutty.
Listen to Grupo Mexico's lawyer, Jorge Lazale, who told the Arizona Daily Star that "today we are not willing to pay everyone in full. [Asarco] decided not to engage with Grupo and now they are paying the consequences. Now they will get cents on the dollar." Lazale also said that Grupo Mexico now estimates that the debtor isn't worth more than $200 million. Really?! That's a staggering $2.5 billion less than Grupo Mexico's original $2.7 billion offer it made for the company that it only dropped on Dec. 1. (Asarco since has ceased negotiations with the parent company.) Sterlite wasn't quite as frank. Anil Agarwal, CEO of Sterlite's parent company, Vedanta Resources, said it was interested in Asarco, but was negotiating for the right price. "We have been in negotiations with the management of the company and the court for a renegotiated price," he told CNBC. "At the right price, we are keen to acquire the assets." Sterlite (USA) on Thursday still technically had a live offer in front of it, since that's when a $50 million letter of credit it provided to Asarco as a deposit was to expire. Asarco hasn't drawn down that deposit. Sterlite's latest offer is $2.1 billion, a decrease from the $2.6 billion it backed out of on Oct. 13. When it reduced the offer by a more realistic $500 million, Sterlite blamed frozen credit markets and the decline in copper prices for its inability to finance its own operations and complete the acquisition. But there is a wild card that makes Lazale's comments a bit more wild-eyed. At a Jan. 13 status conference in front of Judge Richard S. Schmidt in the U.S. Bankruptcy Court for the Southern District of Texas in Corpus Christi, Asarco disclosed that it was not only still negotiating with Sterlite and Grupo Mexico, but that it was also considering a third proposal with Glencore International AG. Someone here is trying to be the optimist -- Lazale about an unbelievable drop in the price Asarco would fetch, and maybe Asarco about the real interest that suitors still have in it. But this has always been a murky case, and it seems as if that plotline will only continue. - Jamie Mason Categories Deal Video
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