Mexican steelmaker Ahmsa has new controller

Steelmaker Altos Hornos de México (Ahmsa) agreed in a shareholders meeting on Thursday to complete the process of adding new share capital to the company under the terms established with US asset manager Argentem Creek Partners, making it the new controller.

"Due to their characteristics in terms of the future development of the company, the proposals presented by Argentem were considered the most suitable, over those of other interested parties previously analyzed and which did not move forward," the steel company said in a statement.

The financial details of the transaction will be disclosed when the contracts are formalized and the payment is deposited in a trust in the name of both parties, a source familiar with the transaction told BNamericas.

Ahmsa, based in Monclova, Coahuila state, which was controlled by Grupo Acerero del Norte (GAN), is going through a difficult financial situation and is also suffering labor problems. The company has not produced any steel since the end of last year.

On February 20, GAN agreed to transfer its majority stake in Ahmsa to foreign investors in exchange for a financial bailout, including US$200mn in working capital to cover operations and obligations with its workforce.

Of that amount, the first US$50mn was due to be paid by March 15 and the remainder by May 15, according to the steel company.

With the presence of holders of over 62% of the company's share capital at the ordinary shareholders' meeting on Thursday, the resignations of the Ahmsa board of directors were ratified and approved, with Alonso Ancira Elizondo, Jorge Ancira, José Eduardo Ancira, James Pignatelli and Juan Carlos Quintana Serur stepping down.

Luis Zamudio Miechielsen was confirmed as CEO of Ahmsa and he will be responsible for reactivating the operations of the company.

Argentem also received the proposal for the new board, headed by Eugene Irving Davis as chairman, and the directors Mario Fernando Espinosa, Steven Donald Scheiwe, John Abbot, Juan Williams Ponder, Timothy Bernlohr, Johannes Sittard, Leopoldo Burillo, Luis Zazueta, Xavier Autrey and Andrés González Saravia-Coss.

Argentem Creek Partners is an emerging markets credit specialist founded in 2015. The New York-based firm says it manages more than US$850mn in client assets and has resources in Abu Dhabi, Buenos Aires, London, Minneapolis and New York.

Eugene Davis has been president and CEO of several US companies, including FTS International, Bonavista Energy, Destination Maternity, Parker Drilling, Emerge Energy Services, Millennium Health, Entegra Power Group, Bluestem Group, and Global A&T Electronics, according to website Market Screener.

The shareholders decided to revoke all the powers granted to the previous directors and it was established that the agreements reached will go into force immediately once the conditions established in the "mini-dip" agreement are met and the respective contracts are formalized.