Business Standard reported that Sterlite Industries may get the support of rival bidder Harbinger Capital Partners in its takeover plan for the bankrupt US copper mining firm, Asarco. Harbinger has decided to withdraw from the race, informing the bankruptcy court that its plan to restructure Asarco should not be considered.

Harbinger had given a USD 500 million takeover offer to the US bankruptcy court at Corpus Christi in May, countering the bids of Sterlite and Grupo Mexico, the estranged parent of Asarco.

Harbinger said that its plan for Asarco should be set aside. Later, a confirmation hearing was held on the other 2 plans, of Grupo and Sterlite. Informed sources said that if both plans fail to get confirmation from the court, the hedge fund’s proposal will be revived as per the rules.

Harbinger, which has support from Citigroup Global Markets Inc, earlier extended its support to Asarco in the fight against Grupo Mexico and the environmental suits. Asarco, which owns 3 copper mines in Arizona, was sued for USD billion due in an environmental clean p suit.

Industry experts said that according to court documents, Citigroup and Harbinger together comprise Asarco’s largest bondholders and their support is crucial for Sterlite.

The Indian copper producer had offered USD 1.1 billion in cash and about USD 600 million of senior secured notes, payable over 9 years, to Asarco. In a counter bid, Grupo had offered USD 1.3 billion in cash and a USD 250 million fully committed loan to regain control of Asarco.

A couple of days earlier, Mr M S Mehta CEO of Vedanta said that the company has “no immediate plans” to raise the bid it made to acquire Asarco. He added that “Our bid reflects the current market conditions.”

Mr Mehta said that Sterlite is the preferred suitor by Asarco’s unions, management and creditors.

(Sourced from business standard.com)