Mexican steelmaker Ahmsa's restart seen to depend on government action

The reactivation of steelmaker Altos Hornos de México's (Ahmsa) operations depends on the government, which must approve a financial restructuring plan proposed by investment fund Argentem, according to a company spokesperson.

After President Andrés Manuel López Obrador said the government would seek to attract investors to help Ahmsa pay its debts with government bodies if major investor Alonso Ancira sold his shares, local media quoted communications head Francisco Orduña Mangiola as saying that the company has a financing option, but it has not advanced due to government stonewalling.

Orduña said initial funds are guaranteed, but they will only be available once the new shareholders get approval of the restructuring plan.

Under the plan, Ahmsa would pay the debts as the only way to guarantee the company’s viability. Overall, Ahmsa owes 5bn pesos (US$30mn) to tax authorities, federal oil company Pemex and public utility CFE, among others.

"As always, the president handles other data that does not correspond to reality and he will never admit that he started the problem with fabricated accusations," Orduña said.

One of Mexico’s largest steelmakers, Coahuila-based Ahmsa faced financial and labor problems last year, which forced it to stop production in December.

In April, Ahmsa agreed to a takeover by US asset manager Argentem Creek Partners, but the new owners have been unable to take control.

Orduña claimed only the government can accelerate the implementation of the financial restructuring plan presented by Argentem.

"At this moment, the ball is in the court of the federal government, which for a week has had in its hands the plan for financial restructuring and the restart of operations," he said.

López Obrador, meanwhile, urged Ancira to hand over control so that restructuring can begin. Orduña said Ancira formally exited the company after the last shareholders' meeting, where the share transfer agreement was announced and a preliminary board was selected in line with proposals of the new owners.

"The legal steps for the transfer of control have been concluded and [Ancira] only has one nominal activity left, that of calling the assembly in which the transfer will be formalized with the entry of the new leadership," said Orduña.

He added the government must urgently approve the restructuring to enable capitalization and resolve a crisis which greatly affects localities in Coahuila.