A federal judge handling the judicial process of financial restructuring of the Altos Hornos de México steel company (AHMSA) said that the company is prohibited from holding shareholder meetings that modify the company's share structure, as intended for December 21. In addition, the judge will prohibit the seizure of the company by the state oil company Pemex.
“(AHMSA has) a prohibition on holding corporate meetings that modify the administration of the merchant,” the Second District Court on Commercial Bankruptcy Matters decreed last week, according to judicial edicts seen by SteelOrbis.
The court reported that the conciliator (the person in charge of reviewing AHMSA's financial situation) requested authorization on October 31 to hold a shareholders' meeting. Last week, SteelOrbis published that the current board of directors, headed by Alonso Ancira Elizondo, called a shareholders' meeting so that investors led by the New York investment fund manager Argentem Creek Partners take control of the company.
Upon assuming control of AHMSA, the new investors led by Argentem will request a loan of up to $600 million to reactivate steel production.
Last February, Argentem Creek signed an agreement to purchase a controlling stake in AHMSA, subject to several conditions. According to sources consulted by SteelOrbis, the meeting on December 21 to formalize the change of controlling shareholders of AHMSA has already been held.
One of the drawbacks is that among AHMSA's debts is the agreement to repair damages from Ancira Elizondo and AHMSA to the state oil company for $216.5 million (plus interest on unpaid balances) divided into three parts. In November 2021 and November 2022, two payments of $104.2 million were made and the third payment of $112.5 was agreed for last November 30, which was not paid due to the company's insolvency, which forced it to stop its operation at the beginning of the year.
According to the reparation agreement with Pemex, of which SteelOrbis has a copy, in case of non-payment, the state oil company can seize the assets as collateral.
Given this fact, the conciliator asked the judge handling the AHMSA commercial bankruptcy to “issue a letter to the Administrator of the Federal Criminal Justice Center in Mexico City with headquarters in the North Reclusorio, so that he refrains from carrying out any act of execution and/or seizure order against the merchant (AHMSA).”
AHMSA's most recent public financial information, seen by SteelOrbis, shows that the steelmaker has assets of $2.30 billion and total liabilities of $3.20 billion and negative stockholders' equity (technical bankruptcy) of almost $900 million.