Currently non-producing Mexican steel company Altos Hornos de México (AHMSA) requested from the state-owned Federal Electricity Commission (CFE), through the federal judge hearing its bankruptcy case, a payment schedule for its debts and a prohibition on cutting off the supply of electricity due to the possibility of a new investor who will inject capital to restart operations.
“(AHMSA) is already in negotiation with new investors who will inject fresh resources (capital) into the company in order to start ordinary operations; Therefore, it states that the Federal Electricity Commission should be prohibited from cutting off the energy,” show the judicial records of the Second District Court for Commercial Bankruptcies, reviewed by SteelOrbis.
“Likewise, it requests that AHMSA be provided with a payment plan, in order to avoid damages that cannot be repaired to the estate (company assets),” the list reads.
Due to its insolvency, AHMSA stopped its operations at the beginning of last year. With an annual production capacity of 5.5 million tons of steel, AHMSA is in negotiations with Chinese and American investors led by New York investment fund manager Argentem Creek Partners.
In a recent (December 21) shareholder meeting that was scheduled to finalize the purchase of a controlling share package of AHMSA, it was not held by order of the same judge. However, at that meeting it was agreed to contract a loan of up to $350 million to reactivate production.
To negotiate the payment plan, the judge ordered that AHMSA must pay the electricity consumption subsequent to June 22 of last year, the date that was declared in bankruptcy. Although the steel company also informed the magistrate that the CFE intends to collect unconsumed electricity during the period in which production is paralyzed.