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NRI businessman Anil Agarwal controlled Vedanta Resources could face fresh challenge in acquiring US copper firm Asarco. Mexican mining company Grupo Mexico, under whose management control Asarco went into bankruptcy protection four years back, has put in a fresh bid of $1.3 billion in cash against Vedanta’s $1.7 billion bid made last October.

Although, Grupo Mexico’s bid is lower than Vedanta’s, it has a higher cash component. Vedanta had offered to pay $1.1 billion in cash, plus a note for $600 million as against Grupo Mexico’s $1.3 billion cash offer.

Vedanta had in October revised down its earlier bid price of $2.6 billion citing global credit crunch as also because commodity prices including that of copper had crashed due to global economic slowdown.

Now the ball is in the court of US Bankruptcy Court which will have to decide which of the two bids offers better terms to Asarco's numerous creditors.

According to a Dow Jones report, Grupo Mexico has claimed support of a key group of Asarco creditors to its offer. The creditors are claimants to damages from asbestos liabilities. Asbestos litigants had earlier opposed the deal to sell Asarco to Vedanta Resources. Some creditor groups including the committee representing unsecured creditors, has supported the Vedanta offer.

Grupo Mexico, which acquired Asarco in a leveraged buyout in 1999, lost board control when Asarco filed for bankruptcy protection. It is now facing court cases over alleged asset striping from Asarco which led the copper maker to bankruptcy. If the Mexican firm finally loses the case it would have to transfer back shares of one of Asarco’s units back to the US firm which could help Asarco come out of bankruptcy.

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