After a temporary setback in its bid to win over bankrupt US copper miner Asarco, where a US judge allowed a rival bidder to submit a reorganisation plan for Asarco, Sterlite Industries is in for some relief. The workers of Asarco and Sterlite have reached an agreement on the terms of collective bargaining that would go into effect once the proposed acquisition is approved by the bankruptcy court overseeing Asarco?s Ch 11 case.
?This move is a positive step for Sterlite?s position though the ball is still not in their court. The US bankruptcy judge has allowed Grupo Mexico to submit a reorganisation plan and now everything depends on the court which will take a decision after evaluating Grupo Mexico?s and Sterlite?s proposal,? said a Mumbai-based investment banker.
Sterlite Industries (India) on Thursday in a statement to the BSE informed that the new collective bargaining agreement, which fully retains all existing worker benefits, contains terms that are designed to ensure that Asarco?s operations will be improved and made more competitive. There are also strong commitments to ensure that Sterlite invests in and operates all of Asarco?s existing operations. The parties have also agreed that the term of the current agreement expiring in 2010 will be extended by three years to 2013. Sterlite stocks were up 1.93% on the BSE to close at Rs 650.80.
Anil Agarwal, chairman of Sterlite in a statement said, ?We look forward to working with the unions and Asarco?s highly-skilled employees. Sterlite is also pleased that it has been granted bid protections by the bankruptcy judge, which represents another important milestone in the acquisition process.?
The Asarco board had accepted Sterlite?s $2.6 billion bid on May 30 this year. The judge also allowed for $52 million break-up fee if Grupo Mexico?s bid would be accepted.
Asarco?s acquisition, if successful, will make Sterlite the world?s third largest copper miner.
