Ahmsa to give new debt repayment plan to creditor banks

Ahmsa to give new debt repayment plan to creditor banks

The Mexican steelmaker Altos Hornos de Mexico (Ahmsa) is expected to present a new debt repayment plan by the creditor banks. In the previous weeks, AHMSA held a shareholders meeting just a couple of hours before the creditor banks' were to hold another meeting aiming to gather shareholders to replace the present management of the company, who are claimed not to have made any payment regarding the company's debt of $ 18 billion since the receipt of a court order allowing suspension of debt repayments in May 1999, with another team more cooperative with the creditor banks. At that stage, the creditor banks believed the shares they held as guarantees against loans gave them the right to control AHMSA, however a court ruling dated October 31, 2002 implied that such shares did not provide voting rights to the banks due to protection under Mexico's payments suspension law. According to latest reports, AHMSA offered the creditor banks including Bank of America, BBVA-Bancomer and Banamex-Citibank 40% stake in the company, bringing the suspension of debt repayment status to an end. This debt-for-equity deal will reduce the $1.8 billion debt down to $1.3 billion. The current AHMSA management will retain the 50.1% stake of the company via its holding Grupo Acerero del Norte and extend the $500 million debt repayment over a 15 year period. Minority shareholders, whose stock is suspended from trading since the suspension of repayments in 1999, would hold the remaining 9.9% stake. The banks are currently studying the proposed plan.