AHMSA Emerges From Suspension of Payments Proceeding

May 17, 2016

Altos Hornos de México S.A.B. de C.V. is the largest steel producer in Mexico.

On May 16, Willkie client Altos Hornos de México S.A.B. de C.V. (AHMSA), the leading integrated steel producer in Mexico, emerged from its suspension of payments proceeding. The lifting of suspension of payments was ordered by the First Civil Court of First Instance in the Judicial District of Monclova, Coahuila. Suspension of payments is a form of reorganization with the goal of rehabilitating the debtor company. As a result of the lifting of the suspension of payments, the claims against AHMSA (in the original amount of approximately US$1.7 billion) were converted into the right to receive payment in full, in Mexican pesos, three years from the lifting date. In addition, eligible creditors had the option to elect to convert a portion of the three-year payment rights into a combination of cash and stock in AHMSA.

The lifting of the suspension of payments positions AHMSA to further its long-term business potential. As Mexico’s largest integrated steel producer and Mexico’s only producer of plate, tin plate and tin-free steel, AHMSA is uniquely situated to capitalize on favorable growth trends in Mexico’s domestic energy and manufacturing industries, including automotive manufacturing, petroleum as well as natural gas pipeline projects and infrastructure construction.

Partner Maurice Lefkort led the negotiations with the financial creditors over the entire suspension of payments proceeding. Also working on the AHMSA matter at the time of the lifting of the suspension of payments were associates Joseph Antignani, Andrew Prodromos and James Rosenthal. Partner Marc Abrams and associates Ji Kim and Christopher Koenig provided additional restructuring advice.