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AHMSA shareholders approve $350 million credit to reactivate production

Thursday, 21 December 2023 23:14:47 (GMT+3)   |   San Diego
       

Although a federal judge prohibited the holding of a shareholders' meeting of the paralyzed Altos Hornos de México (AHMSA) steel company, today the request for a $350 million loan was held and approved to reactivate production paralyzed since the beginning of the year due to insolvency. In addition, with 61.96 percent of the votes present, the entry of new shareholders was approved.

“It is resolved to approve the eventual celebration of the credit contract with various foreign investors, for an amount of $350 million,” AHMSA informed the stock market regarding the meeting held at the company's facilities in the northern city of Monclova (Coahuila), 178 miles southwest of the border city of Laredo, Texas.

“It is resolved to approve and authorize the assumption of the liability by AHMSA derived from the execution of the credit contract with various foreign investors and any other act, contract, agreement or instrument by which the granting of DIP Financing is recorded” , he reported.

Capital will be received through a senior secured superpriority multi-tranche debtor in possession term loan facility (DIP Financing). Financing used by companies in judicial restructuring processes, such as the case of AHMSA through bankruptcy proceedings.

DIP Financing has priority over other types of debts and existing claims. The new shareholders of AHMSA will also discuss the pending payment of $112.5 million to the state oil company Petróleos Mexicanos (Pemex) that Alonso Ancira signed to repair alleged damage to the state company. This payment is the third, which was not paid on November 30 and at the moment Alonso Ancira is not protected for non-compliance, only the company is protected.

Regarding the change of administration to complete the sale of the controlling share package of AHMSA in the hands of Alonso Ancira Elizondo to investors led by the New York private equity manager Argentem Creek Partners, which last February signed an agreement to buy the Mexican steel company, The company reported that it complied with the prohibition of the federal judge who is carrying out its financial restructuring process (commercial bankruptcy) and the change of the board of directors was not made.

AHMSA is the largest integrated steel company in Mexico with a capacity of 5.5 million metric tons of annual steel production through blast furnaces and an electric arc furnace.


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