Argentem Creek Partners, a New York-based investment fund, is set to revive Mexican steel company AHMSA by proposing a loan of up to $600 million from various financial institutions. With AHMSA facing a restructuring impasse, including the resignation of its board, Argentem's plans signal progress. The investors' recent visit to AHMSA's facilities in Monclova, Coahuila, has accelerated the process, fueling optimism for the steelmaker's potential production restart in February 2024.
Argentem Creek Partners, a New York investment fund, is poised to reignite AHMSA, a prominent Mexican steel company, by seeking a substantial loan of up to $600 million from multiple financial institutions. The fund's intervention aims to break the restructuring deadlock, which led to the resignation of AHMSA's entire board, including major shareholder Alonso Ancira. Conditioned on government acceptance, Argentem aims to assume board control within 20 days.
In March, Argentem inked a deal with Alonso Ancira to acquire AHMSA's controlling shares, contingent on the government's approval to restructure AHMSA's over $500 million debt with the public administration. Recent developments showcase a positive turn as the fund's key directors, alongside other investors, conducted a visit to AHMSA's Monclova facilities, sparking renewed enthusiasm among investors.
The imminent formalization of a syndicated loan, amounting to $600 million, signifies robust interest from financial institutions to support AHMSA's resurgence. Set for deliberation in a shareholders' meeting on December 21, this financing is critical for AHMSA's production restart, projected for February 2024, pending credit approval and contingency-free proceedings.
Experts indicate that shareholders' approval will likely result in a senior secured super priority multi-tranche debtor in possession term loan facility (DIP Financing). This financing structure, common in companies undergoing judicial restructuring, grants priority over other debts. Additionally, AHMSA's new stakeholders will address the pending $112.5 million payment to Pemex, previously committed by Alonso Ancira, to settle purported damages.
Argentem Creek Partners' proactive measures to secure a substantial loan for AHMSA signal promising strides toward the steel company's revival. With potential financing and a shareholders' assembly looming in December, AHMSA could witness a resurgence in steel production by February 2024, marking a significant turn in its restructuring journey. This revitalization effort positions AHMSA on a path towards financial stability and potential operational rejuvenation.