The Mexican steel industry has been shaken by the dramatic downfall of Altos Hornos de México, one of the country's largest steel producers, as it grapples with bankruptcy proceedings and the collapse of a potential rescue deal. The company, which boasts a production capacity of 5.5 million metric tons of liquid steel, has been paralyzed by insolvency since early 2023, marking a significant crisis in Latin American steel manufacturing.
The situation took a critical turn when New York-based investor Argentem Creek Partners' attempted acquisition of AHMSA failed, triggering the resignation of key board members. Eugene Irwin Davis (chairman), Timothy Bernlohr (counselor), and Leopoldo Burillo (counselor) submitted their definitive and irrevocable resignations from their provisional positions on the board of directors. This development has left Alonso Ancira Elizondo maintaining his position as the company's board chairman.
The financial magnitude of AHMSA's crisis is staggering, with the company facing $5.75 billion in liabilities against assets valued at only $2.0 billion. This severe imbalance has rendered the company's debt structure unsustainable, leading to the current bankruptcy proceedings. The disparity between assets and liabilities highlights the depth of the financial challenges facing the once-mighty steel producer.
The legal process has entered a critical phase with the appointment of a trustee who will oversee the complex task of asset transfer and liquidation. Given AHMSA's extensive operations, including integrated mining complexes, experts estimate the complete transfer of assets could extend over a month. The process is particularly complex due to the scale and integrated nature of AHMSA's operations.
The bankruptcy declaration opens new possibilities for asset disposition, with the board of directors retaining the ability to seek potential investors for asset purchases, subject to judicial approval. This process represents a significant shift in the company's trajectory, as all assets will be sold free of existing financial and labor liabilities, potentially making them more attractive to prospective buyers.
Legal experts familiar with the case note that attempts to overturn the bankruptcy declaration face significant hurdles, as existing jurisprudence supports the current proceedings. This legal framework provides a clear path forward for the resolution of AHMSA's insolvency, despite potential challenges from various stakeholders.
The implications of AHMSA's collapse extend beyond the company itself, affecting Mexico's industrial sector and thousands of workers. The situation represents one of the most significant corporate bankruptcies in recent Mexican history, with ripple effects throughout the regional economy and the global steel industry.
