Asarco parent says plan allows $2.9 billion for creditor distribution

By Caroline Salls

Pittsburgh, June 3 - Americas Mining Corp., an affiliate of Grupo Mexico SAB de CV, said $2.9 billion will be available for distribution to Asarco LLC creditors under the parent company's amended plan of reorganization, according to an Americas Mining news release.

As previously reported, Asarco LLC parent Americas Mining and Asarco Inc. filed an amended plan June 2 that increases the parent companies' contribution and eliminates a recovery cap for some creditors.

Under the amended plan, Americas Mining will contribute $1.55 billion to Asarco LLC, which will be used with cash Asarco currently holds to provide $2.9 billion for creditor distributions.

In contrast, Americas Mining said a competing plan under consideration by the U.S. Bankruptcy Court for the Southern District of Texas, which was submitted by India-based Vedanta, offers only $1.1 billion in cash and a non-interest bearing so-called copper note, which Vedanta values at $200 million.

Americas Mining said the Vendanta plan is backstopped only by a $100 million letter of credit, which the Asarco parent company has funded an escrow with $1.3 billion to backstop its plan.

A third plan, offered by Harbinger Capital Partners, amounts to $500 million in cash with interests in litigation against Vedanta and Americas Mining that may never be realized, the release said.

Americas Mining said the Harbinger plan provides a total of $1.8 billion available for distribution to creditors, and the Vendanta plan calls for a total of $2.4 billion for distribution.

In addition, Americas Mining said its amended plan offers to pay Asarco LLC creditors up to 95% of their claims, including payment of $1.303 billion to Americas Mining, plus a $250 million secured note to pay asbestos claims.

However, the parent company said the Vedanta plan offers to pay only $2.4 billion on the date of confirmation and then provide payments through an interest-free note over nine years that are dependent on the price of copper.

"In total, the AMC plan offers an additional $420 million in cash to be distributed to creditors than the Vedanta plan," Americas Mining said in the release.

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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