Nov. 15 (Bloomberg) -- Grupo Mexico SAB can regain control of its bankrupt U.S. copper miner, a judge in Texas ruled in rejecting a competing offer from Sterlite Industries (India) Ltd.

U.S. District Judge Andrew Hanen in Brownsville, Texas ruled that Grupo Mexico’s proposal to pay about $2.5 billion to Asarco LLC’s creditors “is both feasible and confirmable.”

The decision means that, barring a successful appeal by Sterlite, Grupo Mexico should be able to take back control of the Tucson, Arizona based copper miner.

Grupo Mexico and Sterlite each promised to spend more than $2.5 billion to guarantee that Asarco’s creditors are repaid in full. In ruling in favor of Grupo Mexico, Hanen agreed with a lower-court opinion from the bankruptcy judge that oversaw Asarco’s case for five years.

“In many ways the course of this bankruptcy has been a contentious and hard-fought piece of litigation,” Hanen wrote in his decision, which came late Friday evening.

The plan calls for Grupo Mexico to contribute $2.2 billion in cash to Asarco to pay creditors. an additional payment of about $1.4 billion will be made by Asarco, Grupo Mexico said in a statement today. Asarco will issue a one-year note for $280 million to pay asbestos creditors and forgive $161 million worth of Asarco tax obligations to Americas Mining Corp., a Grupo Mexico unit.

The plan will be funded with $1.4 billion of financing from “internationally recognized financial institutions” to Americas Mining Corp. and $800 million from Grupo Mexico, the company said. Americas Mining Corp. will post a $2.2 billion cash deposit to close the plan, Grupo Mexico said.

The case is In re Asarco LLC, 05-21207, U.S. Bankruptcy Court, Southern District of Texas (Corpus Christi).

To contact the reporters on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net.

Last Updated: November 15, 2009 17:04 EST