New auction seeks to preserve operations of Mexican companies AHMSA and Minosa

The Mexican courts approved the terms to move forward with the sale of Altos Hornos de México (AHMSA) and its subsidiary Minera del Norte (Minosa) as a productive unit, seeking to preserve their operations during the bankruptcy process.

The ruling, issued on June 2 by the Judge of the Second District in Commercial Insolvency Matters, Ruth Huerta, and related to case files 19/2023 and 77/2022, validates the divestiture proposal submitted by trustee Víctor Aguilera, with certain modifications, according to information published by El Universal and El Financiero.

According to the court ruling, the central objective of the process continues to be to avoid the fragmentation of assets and to support the preservation of industrial operations. "The focus of the auction continues to be the preservation of the companies and therefore, the sale as a Productive Unit is sought," states the agreement cited by El Financiero.

The authorization represents a significant step forward in the steelmaker’s insolvency proceedings, which has been facing a severe financial crisis for several years and has kept a large part of its operations in Monclova, Coahuila, shut down.

According to El Financiero, Aguilera indicated that the agreement constitutes a key step to move forward with the insolvency proceedings and address the claims of creditors and workers.

As part of the ruling, the judge granted a period of three legal days for the receivership to deliver the final terms that will govern the auction, as well as updated information on labor liabilities and the situation of the creditors.

"The trustee was required to, within three legally computed days, present the terms that will govern the auction, the final list of workers, and the bankruptcy quota of the creditors," states the court document.

Likewise, the trustee must present the final list of affected workers, with a breakdown of preferred labor claims and those that do not have such priority, as well as the insolvency quota corresponding to the creditors of both companies, according to El Universal.

The judge also acknowledged the complexity of the process and the implications for the different parties involved. "This judge reiterates that she is aware of the different realities surrounding the parties involved in the bankruptcy proceedings," said Huerta García, according to the simplified version of the agreement released by the receivership and cited by El Financiero.

The new stage comes after the previously scheduled auction was declared void on February 27, because none of the interested parties met the requirements established by the court, reported El Financiero.

Once the requirements ordered by the judicial authority have been met, the process will move forward to the preparation and execution of the auction. According to information published by El Financiero, the bidding is expected to start with a reference value of US$1.127 billion (bn), equivalent to 85% of the estimated value of the productive unit.

The joint sale of AHMSA and Minosa seeks to offer a solution that makes it possible to meet accumulated financial obligations and, at the same time, preserve the productive capacity of two companies considered strategic for the economy of Coahuila and northern Mexico.

(The original version of this content was written in Spanish)