Grupo Mexico said on Thursday it would put forward up to $4.1 billion to pay off claims against its bankrupt copper mining subsidiary Asarco LLC.
Under the proposal made by a Grupo Mexico attorney in federal bankruptcy court in Corpus Christi, Texas, the company would put up $2.7 billion, use $1 billion Asarco has on hand and then put in a further $440 million, if needed.
An Asarco board member said he would ask the full board to evaluate the new proposal.
Thursday's proposal puts numbers on Grupo Mexico's repeated promises for a full recovery for environmental and creditor claims against its indirect subsidiary Asarco.
The parent has submitted numerous proposals, said Asarco attorney Jim Prince. They've continued to evolve. We've seen one today.
The proposal could exceed by $500 million the $2.6 billion winning bid placed on May 30 by Sterlite Industries Ltd, an affiliate of London-listed Vedanta Resources Plc, for Asarco's working assets.
A spokesman for Asarco, based in Tucson, Arizona, declined comment on the proposal.
Asarco board member H. Malcolm Lovett Jr said the directors needed to evaluate Grupo Mexico's proposal.
Consistent with my fiduciary duty, I think it's important we have a board meeting and have our advisers discuss this, Lovett said in testimony in bankruptcy court.
Federal bankruptcy Judge Richard Schmidt is considering whether to authorize a $52 million breakup fee Sterlite wants available before it spends up to seven months hammering out a buyout of Asarco's assets.
Grupo Mexico, which was one of the losers in the bidding to Sterlite, opposes the breakup fee as it battles to win control of its subsidiary. Grupo Mexico lost board control over Asarco when the copper miner filed for bankruptcy in 2005.
Grupo Mexico has promised to do everything in its power to keep the copper miner.
Sterlite said on Thursday it overcame another obstacle critics had said would be a stumbling block.
Asarco agreed to a successor contract for its mine workers with the United Steelworkers union, said Richard Seltzer, attorney for the Steelworkers, North America's largest industrial union.
Asarco owns three copper mines in Arizona and filed for bankruptcy protection in 2005 after it was sued for $1 billion over environmental clean-up and asbestos claims.
An ongoing lawsuit in Brownsville, Texas, could cost the company up to $11 billion, attorneys for the plaintiffs have said.
The acquisition would give Sterlite, India's top non-ferrous metal producer, total copper smelting capacity of 635,000 tonnes per year and proven copper reserves of 5 million tonnes. (Editing by Louise Heavens and Quentin Bryar)
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