The Mexican government would lose more than $500 million with the bankruptcy of steel giant Altos Hornos de México (AHMSA), an amount sufficient to finance more than seven years of physical investment in the education of Mexicans, according to a SteelOrbis analysis with information of experts in business insolvency.
“In a bankruptcy process, the priority of payments is determined, first to the workers, then the Treasury, and so on, until the last supplier. Therefore, everyone must do their part, otherwise they will kill the company,” Miguel Angel Tavares, President of the Fiscal Commission of the Mexican College of Public Accountants (CCPM), told SteelOrbis in a telephone interview.
The Mexican government has had since last March a proposal from the American Argentem Creek Partners to restructure AHMSA's debts related to taxes and other payments related to the federal public administration. However, to date there has been no response to the potential purchase of the steel company.
Data from the steel company, seen by SteelOrbis, reveal that until last year the debt only for taxes was for the equivalent of $408 million (MXN 7,139 million).
The tax debt plus the third reparation payment to Petróleos Mexicanos (Pemex) for $112.5 million, total $520 million (MXN 9,107 million). That amount is enough to pay a physical investment amount to Mexican education, which in the first half of 2023 was spent MXN 583 million ($33.4 million). With that figure, 15.6 semesters or 7.5 years of physical investment are paid.
With that $520 million, the equivalent of 1.5 years of physical investment to the federal health system of Mexico would also be paid.
To the $520 million mentioned, it is necessary to add the debt to the state company, the Federal Electricity Commission (CFE), social security, the federal mortgage system (Infonavit), among others.
AHMSA's has also still not paid its almost 14,000 direct workers, and due to insolvency, without sufficient police surveillance, the company is the victim of acts of vandalism that led to the damage of priority assets (coking plant) and the main iron ore mine.
A consulted metallurgical expert commented that it should be checked if the blast furnace was turned off correctly because otherwise, the company will have a minimum value.
Until the end of last year, AHMSA's debts were close to MXN 56,500 million ($3,230 million) and its assets of $2,326 million. That is, it has a technical bankruptcy or insolvency of $900 million, according to information seen by SteelOrbis.
Tavares commented that depending on the situation of any company, there is the possibility of reducing debts. He specified that according to the reform of Article 39 of the Federal Tax Code, forgiveness is prohibited, but debt reductions are allowed.
The process is complex because the steel company is facing a process of financial restructuring with a law repealed for 23 years. In this scenario, the company Transportes Especializados Bortoni (TEBSA), sued the judicial restructuring of AHMSA through the new Commercial Bankruptcy Law. On June 22, 2023, it was declared in bankruptcy.
In that controversy, the general director of the Federal Institute of Bankruptcy Specialists (IFECOM), Edgar Bonilla del Ángel, told SteelOrbis in a telephone interview that this situation will be resolved in court through an amparo proceeding. However, this could "go on for a long time because it is a very complicated subject."
The IFECOM is an auxiliary body of the Federal Judiciary in charge of registering the personnel (visitor, bankruptcy conciliator or liquidator) that supports judges in commercial bankruptcy.
Bonilla even said that the AHMSA case could "be resolved in the Supreme Court of Justice of the Nation." In addition, in any of the processes with the current law or with the repealed law, all creditors must be included.