Vedanta Group subsidiary Sterlite industries has submitted a new bid for bankrupt U.S. copper miner Asarco is almost half the $2.6 billion the Indian miner offered 10 months ago.
India's Economic Times Sunday reported the new bid ranges from $1.4 billion to $1.5 billion with Sterlite reportedly making installment payments over a five-year period. However, the initial payment is expected to be half of the purchase price.
An unidentified source told the Times, This (installment payment) is a child of the bear market. With tight money supply prevailing across the globe, buyers are coming out with innovative plans to fund deals.
If the deal goes through, fifth place Sterlite will become the world's third largest copper miner with an annual capacity of 650,000 tonnes and proven copper reserves of 5 million tonnes.
However, environmental NGOs and several members of Congress have asked the U.S. Justice Department to stop the sale to Sterlite, claiming Vedanta's environmental track record is worst than Asarco's, which filed for bankruptcy after being sued for $1 billion in environmental and asbestos-related litigation.
Grupo Mexico bought Asarco in 1999. However, eventually labor disputes led to a four-month strike, which ended in 2005 when Asarco filed for bankruptcy protection.
Grupo subsidiary Americas Mining had submitted its own reorganization plan to retain its interest in Asarco, offering to pay up to $2.7 billion in as well as post a $440 million to ensure payment of Asarco's liabilities stemming from the asbestos and environmental litigation.
However, a federal bankruptcy court judge in Corpus Christi, Texas, rejected the offer.