Steel Products

CRU: Court Accepts AHMSA's Bankruptcy Request, Investors Named

April 20, 2023

A Mexican court has declared steel sheet producer Altos Hornos de Mexico (AHMSA) bankrupt and appointed the National Chamber of Commerce of Muzquiz city, Coahuila state, as trustee.

The determination, published in the country’s Official Gazette on April 17, follows the company filing a bankruptcy petition in January.

The civil first court of the first instance in Monclova, AHMSA’s home city in northern Mexico, also told the company to file its balance sheet and trade books within 24 hours of the judgment’s publication; ordered seizure of the company’s assets and possessions until the case is resolved; and prohibited AHMSA from making payments or delivering goods of any kind, local media reported. Creditors have to submit their claims within 45 days of the judgement’s publication.

The company has not been producing steel for several months because power has been cut off. The company is burdened by debts to electricity supplier CFE, tax and social security authorities, and others.

According to local media reports, AHMSA is undergoing a bankruptcy process requested by one of its creditors. However, the Monclova civil court’s judgment has its roots to when the company stopped repaying debt totaling $1.7 billion in 1999 under protection of the then Bankruptcy and Suspension of Payments Law. That allowed AHMSA to extend negotiations for more than 15 years.

In December 2014, the company said it was beginning a legal process to cover debts, after reaching an agreement with most creditors. AHMSA has reportedly not complied with that agreement.

In a Mexican stock exchange filing early March, the company said a group of foreign investors would inject an initial $200 million of working capital in two tranches by May 15 to initiate a financial restructuring process, subject to closing conditions. The investors were not named.

Separately on Thursday, via Twitter AHSMA released a statement regarding its sale. The company said they will go ahead with the transfer of shares, and welcome the new capital, under the terms established by Argentem Creek Partners. New directors were also named.

Argentem Creek was founded in 2015 by Daniel Chapman and his former team from Cargill subsidiary, Black River Asset Management, according to its website. They are 100% employee-owned and manage over $850 million in client assets.

CRU

CRU offers unrivaled business intelligence on the global metals, mining, and fertilizer industries through market analysis, price assessments, consultancy, and events.

Ethan Bernard

Ethan Bernard is managing editor for Steel Market Update. He previously worked for American Metal Market as a copy editor in the New York office for two years, starting in 2008. Later, he copy edited AMM’s monthly magazine on a freelance basis from 2015 until 2017. With experience in financial copywriting and textbook publishing, he holds a BA in Comparative Literature from UC Berkeley, and an MFA. in Creative Writing from New York University. He can be reached at ethan@steelmarketupdate.com or 724-759-7871.