Asarco secures final approval of bid protections for $2.6 billion asset sale

By Caroline Salls

Pittsburgh, July 2 - A federal judge ruled Tuesday that Asarco LLC complied with court-approved bid protections when it selected a $2.6 billion stalking horse bid submitted by Sterlite (USA), Inc. in connection with the proposed sale of substantially all of the company's assets, according to a filing with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, Asarco creditors Harbinger Capital Partners Master Fund I, Ltd. and Harbinger Capital Partners Special Situations Fund, LP objected to the final bid procedures on June 10, arguing that the stalking horse bid did not comply with a number of court-approved criteria.

However, in his final bid procedures order issued Tuesday, judge Richard S. Schmidt said Asarco properly marketed the assets and all potential interested bidders were identified.

In addition, Schmidt said a non-solicitation covenant, fiduciary out, superior proposal threshold, matching topping right, break-up fee and expense reimbursement included in the bid procedures were "appropriate and designed to maximize the value of Asarco's estate."

The break-up fee and expense reimbursement will be paid to Sterlite if the sale is terminated under criteria set in the purchase agreement, the final order said.

Schmidt also said the company's selection of Sterlite as the successful bidder was made "under Asarco's sound business judgment" and complied with the bid procedures order.

The assets being 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.

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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