Asarco files bankruptcy reorganisation plan

ASARCO has filed a Plan of Reorganization with the US Bankruptcy Court in Corpus Christi, Texas. The plan implements the previously-announced sale of ASARCO’s operating assets to Sterlite (USA), a subsidiary of Sterlite Industries (India). and Vendanta Resources. It also contains the framework of agreements that ASARCO is formulating with its principal creditors – the US government various states, its unsecured creditors’ committee, a committee of asbestos creditors and a representative of potential future asbestos claimants. “This plan will allow the company to emerge from bankruptcy in a manner that is fair to all constituencies and puts ASARCO’s assets under ownership of a world-class global mining company,” said Joseph F. Lapinsky, ASARCO’s President and CEO. “We acknowledge the hard work over many months by all the parties in the bankruptcy case to achieve this significant result,” he added. “While we still need court approval of our plan, we believe the end of this complex bankruptcy finally is in sight.”

On September 23, 2008, the bankruptcy court will hold a hearing to consider approval of the disclosure statement that explains the plan, and on November 17, 2008, a hearing will be held on the plan of reorganisation itself. This according to an order issued yesterday by the Corpus Christi court.

At the end of May, Sterlite and Asarco issued a joint press release explaining the purchase of Asarco’s operating assets for $2.6 billion.”Asarco, formerly known as American Smelting and Refining Company, is an over 100 year old company and is currently the third largest copper producer in the USA. It produced 235,000 t of refined copper in 2007. Asarco’s mines currently have estimated reserves of approximately 5 Mt of contained copper. For the year ended December 2007, Asarco had total revenue of approximately $1.9 billion. The asset acquisition will be financed by Sterlite through a mix of debt and existing cash resources.

“The integrated assets to be acquired include three open-pit copper mines and a copper smelter in Arizona, US and a copper refinery, rod and cake plant and precious metals plant in Texas, US. The asset acquisition is on a cash free and debt free basis. Sterlite will assume operating liabilities but not legacy liabilities for asbestos and environmental claims for ceased operations.”

“We are delighted to have reached agreement on this important acquisition, which is a significant milestone for our Group,” said Mr Anil Agarwal, Chairman, Sterlite. “This is in line with our stated strategy of leveraging our established skills.”

Asarco is a logical and strategic fit with Sterlite’s existing copper business and is expected to create significant long term value for all stakeholders through:

o Leveraging Sterlite’s proven operational and project skills to develop and optimise Asarco’s mines and plants

o Access to attractive mining assets with long life

o Geographic diversification in the North American market

o Stable operating and financial platform for Asarco.