Asarco agrees to sell substantially all operating assets for $2.6 billion

By Caroline Salls

Pittsburgh, June 2 - Asarco LLC has agreed to sell substantially all of its operating assets to Sterlite Industries (India) Ltd., a subsidiary of Vedanta Resources plc, for $2.6 billion in cash, according to a Sterlite news release.

The sale agreement, which Sterlite said will conclude Asarco's Chapter 11 bankruptcy case, is subject to approval by the U.S. Bankruptcy Court for the Southern District of Texas.

According to the release, the asset acquisition will be financed by Sterlite through a mix of debt and existing cash resources.

The assets to be purchased include three open-pit copper mines and a copper smelter in Arizona, as well as a copper refinery, rod and cake plant and precious metals plant in Texas.

Sterlite said it will assume operating liabilities but not legacy liabilities for asbestos and environmental claims for ceased operations.

"Reaching this agreement with a world class mining company is a giant step forward in our quest to successfully emerge from Chapter 11," Asarco president and chief executive officer Joseph F. Lapinsky said in the release.

"The sale will achieve the overall best value for Asarco, its employees, creditors and the local communities in which we operate."

Sterlite said the sale agreement resulted from Asarco's previously announced plan sponsor selection process. Sterlite's offer was selected on May 23.

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

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