Asarco terminates purchase contract with Sterlite

By Jennifer Lanning Drey

Portland, Ore., Oct. 22 - Asarco LLC terminated its contract with Sterlite (USA), Inc. for the sale of its operating assets and plans to draw on the $50 million letter of credit posted by Sterlite when it signed the purchase agreement in May, according to an Asarco news release.

"We are taking this action in light of Sterlite's disclosure to us last week that it 'cannot and will not' close the sale unless Asarco agrees to a price reduction," Joseph F. Lapinsky, president and chief executive officer of Asarco said in the release.

"Sterlite has repudiated the contract, which gives us the right to terminate it."

According to the release, Asarco is not waiving any of its rights or remedies by terminating the contract, and the company is exploring all possible options to obtain the highest and best value for the estate.

As previously reported, Sterlite had agreed to purchase Asarco's operating assets for $2.6 billion. The purchase and sale agreement was part of Asarco's plan of reorganization.

Mediation sessions will be held Oct. 30 and Oct. 31, and the court has scheduled a status conference for Nov. 4.

The bankruptcy court has suspended all deadlines for objecting to plan confirmation and for confirmation discovery until further order.

Asarco, a Tucson, Ariz., mining company, filed for bankruptcy on Aug. 9, 2005. Its Chapter 11 case number is 05-21207.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.