Willkie Represents Largest Mexican Steel Maker in Filing to Lift Suspension of Payments in Mexican Bankruptcy Court

December 18, 2014

Altos Hornos de México S.A.B. de C.V. (AHMSA) makes filing in Mexican civil court to initiate the lifting of its suspension of payments.

On December 17, Altos Hornos de México S.A.B. de C.V. (AHMSA) made a filing in the Civil Court of First Instance for the Judicial District of Monclova, Coahuila, United Mexican States to initiate the lifting of its suspension of payments. AHMSA, represented by Willkie, is a Mexican corporation that operates the largest integrated steel plant in Mexico.

The filing is supported by a general payment agreement signed by the required majority of its creditors, including diverse suppliers and financial institutions.   In accordance with the Bankruptcy and Suspension of Payments Law, the general payment agreement provides for the payment in pesos of 100% of creditors’ recognized claims of $US 1.7 billion within 3 years of the lifting of the suspension of payments (SP Payment Right). The general payment agreement also provides for certain eligible creditors to capitalize up to 69.15% of their SP Payment Rights for common shares of AHMSA and cash consideration.

AHMSA originally entered into suspension of payments in 1999.  The suspension of payments proceeding has enabled AHMSA to return to financial health, sustain its industrial operations, preserve a source of 23,000 essential jobs for the economy of Mexico, and maintain its position as a highly competitive steel producer in the domestic and international markets.  Willkie has served as principal outside corporate and financing counsel throughout the entire course of the suspension of payments.

The matter was handled by a multidisciplinary Willkie team, including partners Maurice Lefkort and Marc Abrams; and associates Penelope Jensen, Ji Kim, Joseph Antignani and Andrew Prodromos.