Mexican steelmaker Altos Hornos de Mexico (Ahmsa) indicated that it was revoking its sale deal with Villacero’s Allianz Group after it found the latter did not comply with some of the clauses of the deal.
Ahmsa noted in a filing on the Mexican stock exchange BMV on Aug 25, that it had revoked its agreement with Allianz on Aug 17 through its main shareholder and chairman Alonso Ancira Elizondo.
Moreover, the steelmaker said in its BMV filing that after rescinding its deal with Allianz it was exploring other companies who have evinced interest in buying Ahmsa and were optimistic of striking a good deal with them given the high demand and prices for steel at present. Ahmsa had begun negotiations with Monterrey, Mexico-based Villacero in June last year.
Ahmsa has struggled with low productivity over the past year due to financial issues as well as COVID-19 related lockdowns. The cash-strapped steelmaker was operating at 30pc of its total capacity utilization in June when it was navigating the legal requirements to merge itself with Allianz to get additional funding before it could increase its capacity.
Still, the company’s earnings in Q2 2021 increased by 65.81pc compared to the same quarter last year, making it the first positive earnings posted by it since May 2019, when Mexico’s Financial Intelligence Unit had frozen its accounts as part of an investigation against some of its executives.