Five months after the potential new shareholders of Altos Hornos de Mexico (AHMSA) began the process to restructure the debt of up to MXN 5 billion ($280 million) with the federal government, the main obstacles that stopped the injection of $200 million of working capital to reactivate steel production have already been unlocked, according to a local press report.
“For legal reasons I cannot give further details, but finally there is good news. There is some fresh air, we finally have the solution in front of us,” published the local newspaper Vanguardia, citing an interview with AHMSA spokesman Francisco Orduña.
“It has been a very long and cumbersome process, there are still some legal steps that must be taken and (other) agreements with the authorities have yet to be concluded (but) they are already underway. The main obstacles have already been resolved and what remains does not immediately affect the process to receive working capital and gradually start up production,” added the spokesperson for the steel company.
AHMSA, with a production capacity of 5.5 million metric tons (mt) per year, stopped its production due to lack of funds to pay its energy debts (gas and electricity), for which the supply was suspended since the beginning of the year.
In February, the main shareholder of AHMSA, Alonso Ancira, signed an agreement with the American Argentem Creek Partners to sell a shareholding package of control of the indebted steel company that as of September last year (the most current known figure) had total liabilities of $3.18 billion and total assets of $2.46 billion.
In May, President Andres Manuel Lopez Obrador said that he had sent a proposal to restructure debts with public bodies (Pemex, CFE, Infonavit, IMSS, the Treasury (SHCP), among others); however, until June 9 they were in a deadlock.
SteelOrbis contacted Pemex, CFE, Infonavit, the Treasury (SHCP) and the tax collection office (SAT) to find out the progress. However, after a week there was no response.
AHMSA's productive paralysis occurs at a time when its commercial rivals such as Ternium and ArcelorMittal continue to invest in their expansion.
According to the AHMSA spokesperson, quoted by Vanguardia, the steel company "is already in the last few meters to exit the tunnel."
This occurs at a time when the population of Monclova, the headquarters of the steel company, is on the verge of a social outbreak due to the productive paralysis that maintains delays in the payment of the almost 10,000 workers who depend economically on the company, a figure that reaches to 70 thousand when considering indirect jobs.
So far, the steelmaker has generated few resources from the sale of inventories of raw materials, land, transportation equipment and other minor assets.