The Wall Street Journal-20080205-Asarco Looks to Sell All Assets- Holds Talks With Six Bidders

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Asarco Looks to Sell All Assets, Holds Talks With Six Bidders

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Copper-mining company Asarco LLC, which has been in bankruptcy for 2 1/2 years, says it will sell all of its assets and has established a process for interested buyers to submit offers.

Asarco revealed its plans in papers filed yesterday with the U.S. Bankruptcy Court in Corpus Christi, Texas, which is overseeing its bankruptcy case. It said it decided to sell following discussions with creditors.

Asarco didn't identify interested buyers in court papers, but it said it has held discussion with six bidders who have expressed interest in the Tucson, Ariz., company.

An Asarco attorney couldn't be reached.

Asarco filed for Chapter 11 bankruptcy protection in August 2005, weighed down by labor disruptions and billions of dollars in environmental and asbestos-related liabilities. It owns three copper mines in Arizona as well as refining and smelting operations.

Asarco has seen its prospects improve during the bankruptcy case. It negotiated a new labor agreement with the United Steelworkers, restoring production capacity, and has been able to take advantage of rising copper prices fueled by a global commodities boom.

A unit of Mexican mining company Grupo Mexico SA owns Asarco, though it lost control of the company early in the bankruptcy case when the court established an independent board to run Asarco.

A Grupo Mexico spokesman wouldn't comment.

Asarco and its parent have clashed. The parent has complained that it has been sidelined in the case and that Asarco has ignored its proposal to invest $300 million to fund the company.

Asarco has asked the bankruptcy court to approve a process for selling the assets. It wants interested buyers to submit bids three weeks after the court approves the bidding procedures. Asarco wants the power to reject a bid for any reason.

Companies in bankruptcy that sell assets often choose a lead bidder first and then allow others buyers to submit bids through an auction. Asarco told the bankruptcy court that it doesn't want to conduct a secondary auction because its adviser, Lehman Brothers Holdings Inc., has been reaching out to investors since April 2007.

"Armed with the knowledge of a second chance, bidders would resist either participating in or submitting their highest offers in the first round," Asarco said.