Macro Tsimmis

intelligently hedged investment

Sterlite Industries India Ltd. (SLT) update #7

Posted by intelledgement on Sat, 05 Jul 08

Our Indian buildout play, miner/metals refiner Sterlite Industries (SLT), got more bad news earlier this week concerning their $2.6B buyout of the copper assets of bankrupt copper miner Asarco. Asarco’s former owner, Grupo Mexico (GMBXF.PK), received permission from the US bankruptcy court to present their reorganization plan, which apparently involves reacquiring all of Asarco (including the liabilities).

Grupo Mexico have apparently put as much as $4.1B on the table, although as they are proposing the reacquire all of Asarco, the offer is not directly comparable to SLT’s. It’s likely to take some time for the court to sort through the relative plusses and minuses of the competing offers, and thus the consummation of SLT’s acqusition will be delayed accordingly, at minimum. Speaking of plusses, the court has approved a $52 million breakup fee negotiated by Sterlite and the Asarco board; should the board back out of the deal, Sterlite will be due the fee.

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