Delayed, But Not Deterred

May 26, 2004

Grupo México has pulled back from the brink of disaster, after its ill-fated US acquisition. But it is still staggering under a heavy debt burden.

Grupo México's ill-timed, debt-financed acquisition of troubled US copper mining company Asarco in 1999 brought the Mexican mining and transportation conglomerate to the brink of disaster, forcing it into a financial restructuring that lasted years. Now, as a final step to reordering its finances, Grupo México has set its sights on merging two of its main subsidiaries, Southern Peru Copper Corp. and Minera México into single group. If all goes well, and copper prices remain strong, Grupo México could soon be back on its feet. Company executives say their strategy of turning the group into a multinational corporation with mines in the US and Peru as well as Mexico, has been vindicated. The merger would make Americas Mining Corporation (AMC), the holding company for Grupo México's US, Peru and Mexcio operations, the world's second-largest copper producer. But Grupo México still must win over investors alienated by a long...

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