The Mexican controller of steelmaker Grupo Acerero (GASA), Grupo Fonderia, contacted SteelOrbis to correct the status of its US subsidiary GASA Steel, which did not file for Chapter XI bankruptcy protection in the United States.
“Regarding the insolvency process or Chapter XI in the United States of GASA Steel, it is important to clarify that it was not finally carried out. It was a strategy that was considered, but Grupo Fonderia did not continue with the process because it was not necessary,” Nathan Moussan, financial advisor to Grupo Fonderia through the company Kpitalia, told SteelOrbis.
The correction to GASA Steel's information was due to SteelOrbis' August 9 release “US fines Mexican-based GASA's subsidiary $12.5 million for rebar dumping,” which was included in a Grupo Fonderia report to investors on the company's foray into the Mexican debt market, in which it wrongly reports this legal process.
Kpitalia is the structuring agent for a debt program of up to MXN 5.0 billion ($250 million), of which MXN 1.2 billion ($60 million) has been issued so far. These resources are to finance the mini mill with an annual 650,000 metric ton (mt) capacity for slab production that they are building in their home state of San Luis Potosí.
According to the plans told to SteelOrbis, in April of next year they would be starting the technical production tests and in July they could start the commercial production of this input that is transformed into rolled slab.
Nathan Moussan also confirmed that Grupo Acerero does have a provision of $12.46 million for the potential fine for GASA Steel rebar dumping in 2022. The financial penalty, the financier said, is still in process.
“On the issue of dumping, there is still no resolution, therefore, the provision continues and is maintained. The amount ($12.46 million) is not reflected in the quarterly financial statement. However, the provision does appear in the annual report and will be maintained until there is a resolution on the matter,” said Moussan.
The provision for the fine is equivalent to 3.0 percent of GASA's net sales in the first half of the year, according to a brief calculation by SteelOrbis with data from the company's financial report.
GASA Steel is one of three Grupo Fonderia companies incorporated in the United States of America, the other two companies being Galyp International and Galyp Trading. GASA Steel has its headquarters in San Antonio, Texas.
GASA is the fifth largest rebar producer in Mexico with a market share of 11.6 percent in 2023, surpassed by Simec's 11.8 percent, DeAcero's 16.8 percent, Ternium's 18.5 percent and Mexico's largest rebar producer, ArcelorMittal's 18.9 percent.