Altos Hornos de México Secures U.S. Court Recognition Of Its Previously Approved Mexican Court Restructuring Plan For Its Suspension Of Payments Proceeding

  • Lifting of AHMSA’s SP Proceeding in Mexico Canceled Original Obligations to Recognized Creditors and Exchanged Them for the SP Payment Rights
  • Lifting of SP Proceeding and Receipt of Recognition and Relief under Chapter 15 Achieved Without Creditor Opposition

Altos Hornos de México S.A.B. de C.V. (“AHMSA” or the “Company”), one of Mexico’s largest integrated steel producers, reported that the U.S. federal court for the District of Delaware (the “U.S. Court”) today gave full force and effect in the U.S. to the Company’s general payment agreement (the “Restructuring Plan”) and the order of the Mexican Court approving the Restructuring Plan (the “Lifting Order”). In recognizing the now final Lifting Order, the U.S. Court ruled that AHMSA’s assets situated in the U.S. are immune from enforcement actions by Recognized Creditors with claims in the SP Proceeding and further enjoined U.S. creditors with claims in the SP Proceeding from seeking to enforce their claims against those assets. The ruling by the U.S. Court also allows AHMSA to invoke the jurisdiction of the U.S. Court to enforce the prior relief granted by the Mexican Court.

In addition, AHMSA announced that the U.S. Court today (i) recognized AHMSA’s SP Proceeding as the foreign main proceeding under chapter 15, (ii) recognized Mr. Francisco Xavier Gaxiola Fernández as the foreign representative (the “Foreign Representative”), and (iii) granted related relief on a final basis.

No objections were filed by any creditors or parties-in-interest to AHMSA’s petition for chapter 15 protection and related relief, which was previously filed on behalf of the Company by the Foreign Representative. The U.S. Court ruling follows the acceptance of the Restructuring Plan by recognized creditors at its April 18, 2016 creditors meeting and the subsequent lifting of the Company’s SP Proceeding, approved by the Mexican Court through the Lifting Order issued on May 16, 2016.

Energy, Hydrocarbons, Power Generation, Renewable, Clean Energy, Mexico, Annual Event

Energy, Hydrocarbons, Power Generation, Renewable, Clean Energy, Mexico, Annual Event

The Lifting Order and the conclusion of AHMSA’s SP Proceeding is a final, non-appealable matter, as the applicable appeals period in Mexico expired without an appeal having been filed and without creditor opposition. The chapter 15 process provided AHMSA with a centralized venue to address matters related to its administration of the approved Restructuring Plan and the enforcement of the Lifting Order in the U.S.

Recognition of AHMSA’s SP Proceeding as the foreign main proceeding by the U.S. Court gives full effect and force to the Lifting Order in the U.S., facilitating the orderly implementation of the approved Restructuring Plan. Additionally, the granting of related relief by the U.S. Court enjoins all parties in the U.S. from commencing or taking any action to obtain possession of, exercise control over, or assert claims against AHMSA or its assets in the U.S. in contravention of the Restructuring Plan or the Lifting Order.

AHMSA stated: “Securing the recognition, protection and related relief afforded by the U.S. chapter 15 process is the final step in the implementation of AHMSA’s restructuring process. We are excited about the future prospects for AHMSA, given the positive trends in Mexico’s domestic energy and manufacturing sectors, and look forward to enhancing our competitive position as one of Mexico’s largest integrated steel producers with the sound capital structure developed through the Restructuring Plan.”

About AHMSA

Altos Hornos de México S.A.B. de C.V., an integrated steel producer, has two steel plants located in Monclova, Coahuila, and operates its own iron and metallurgical coal mines. Its current nominal production capacity is more than 5 million tons of liquid steel per year, which is then transformed into diverse finished products. Additionally, AHMSA operates thermal coal mines inMexico. It employs over 19,000 workers in steel plants, mines, and services.