Grupo Mexico SAB offered new payment options to creditors of its bankrupt Tucson-based copper subsidiary Asarco LLC as part of an effort to win more support for its proposal to reorganize the mining unit.
Creditors could pick from three options that include collecting cash from a legal judgment worth $7.48 billion against Grupo Mexico's U.S. holding company, Americas Mining Corp., and a proposed, $770 million note.
Grupo Mexico, acting through Americas Mining, is competing for creditor votes with two other proposals to reorganize Asarco. The new proposal would allow creditors to collect money from the legal judgment should Grupo Mexico fail to persuade a U.S. Appeals Court to overturn ruling, according to court records.
Grupo Mexico "has determined not only to match the terms of the debtors' plan, but to improve upon those terms," the company said in a statement, referring to the plan proposed by the independent managers of Asarco.
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Grupo Mexico has also asked U.S. Bankruptcy Judge Richard Schmidt to force Asarco's managers to release details of an alleged agreement they made with affiliate of creditor Harbinger Capital Partners.
Harbinger filed its own reorganization proposal for Asarco, although earlier this month it urged creditors to vote in favor of the proposal by Asarco's managers, who were appointed by Schmidt after Grupo Mexico put the company into bankruptcy in 2005.
Under Grupo Mexico's latest offer, creditors would have three payment choices. Under the first they would split $1.46 billion, plus whatever cash Asarco has at the end the of the bankruptcy case, plus any money collected from a potential lawsuit against one of Asarcoís potential buyers, Sterlite Industries (India) Ltd. Sterlite may be liable to creditors for canceling its first offer to buy Asarco, Grupo Mexico claims.
Under Grupo Mexico's second payment option, creditors would split $1.1 billion, plus any Asarco cash, plus any money from the judgment against Americas Mining, as long as creditors donít collect more than they are owed with interest. That option would also include a $770 million interest-free note paid over nine years.
The final Grupo Mexico option is the same as the second payment plan, but converts the $770 million note into an immediate cash payment of $309 million, according to the company's statement.
Asarco's creditors have until Aug. 5 to vote on three competing payment plans: Grupo Mexicoís offer; a proposal to sell the company to Sterlite Industries for $1.1 billion in cash, plus a note worth $309 million; and $500 million in cash offered by Harbinger.