The president of Mexico, Andres Manuel Lopez Obrador, reportedly rejected a proposal from US-based Argentem Creek Partners to buy Altos Hornos de México (AHMSA) and suggested Ternium or ArcelorMittal as potential buyers.
“The Secretary of the Treasury, Rogelio Ramírez de la O, is in charge of speaking with steelmakers who have companies in Mexico. In Nuevo Leon and Lazaro Cardenas, they are large companies, to summon them to stay (buy) Altos Hornos (AHMSA),” Lopez Obrador said today in his daily conference from the National Palace in Mexico City.
Without naming it directly, the “big” steel company located in Nuevo Leon is Ternium and the one located in Lazaro Cardenas is ArcelorMittal.
"If necessary, I will personally speak with the presidents of the boards of directors, with the owners of these companies to ask them to help us and to participate (by buying AHMSA) and invest on the condition that the debt that the company has with the government as a whole (is paid). It is not going to be forgiven (debt), but it can be restructured so that they can invest because they are going to need fresh money to reactivate production,” said the president.
According to the president's statement, AHMSA's debt to federal government agencies is up to MXN 5.0 billion ($290 million), although the company's total debt (with data as of September 2022) is $3.25 billion and its assets are $2.51 billion.
According to the president, the offer for the two large steel companies is the "guarantee that the Federal Electricity Commission and Pemex will continue to supply energy" to AHMSA.
Since the beginning of the year, due to the insolvency of AHMSA, these State companies have suspended the supply of electricity and gas. Thus the company was paralyzed and they have failed to pay the wages to the workers for several weeks.
Something that the president omitted to report is that the US private capital management fund, Argentem Creek Partners, signed an agreement in February to purchase a controlling share package of AHMSA, an agreement subject to compliance with the requirements to inject $200 million in principle to reactivate the steel production.
Among the requirements is the restructuring of AHMSA's debt to the federal government. Yesterday, sources of information that are perfectly familiar with the restructuring process, commented to SteelOrbis that Argentem has already submitted the debt restructuring proposal to the federal government, however, given the presidential election process in 2024, “everything has stopped.”
Lopez Obrador said that there are companies that tried to buy AHMSA, but that the main shareholder, Alonso Ancira, refused to sell. The case could refer to Julio Villareal, a businessman who sold the Sicartsa steel company to ArcelorMittal in 2006 for more than $1.4 billion.
Press versions have reported that Villacero is a friend of the president and financed part of Lopez Obrador's political campaign to win the presidential elections in 2018. The president endorsed Villareal's purchase of AHMSA. This businessman is also a creditor of AHMSA through the Afirme financial group, owned by him.
The president today recommended Ancira to sign the sale because "if he bets on lawsuits, the plant will be lost and the source of jobs for thousands of workers will be lost."
The region around Monclova, Coahuila, the headquarters of AHMSA, is on the brink of social crisis because the integrated steel mill (coal and iron ore) with an annual production capacity of 5.5 million metric tons of steel, directly employs and indirectly to some 17,000 workers.