Ahmsa, in its bid to recapitalize its finances has sold 55pc of its shares in the subsidiary Grupo Acerero del Norte (GAN) to Alianza Minerometalúrgica International, owned by the long steelmaker Grupo Villacero.
This transaction, however, is subject to approval by the Mexican Federal Economic Competition Commission (Cofece), Ahmsa said in a statement on the Mexican stock exchange without disclosing the proceeds of the sale.
The sale is being viewed as a step towards the two steelmakers developing a partnership to recapitalize Ahmsa. On June 18, Villacero and Ahmsa began negotiations to develop this potential partnership. Since then, Ahmsa continues operating at 35pc of its capacity. The company was working at 60pc of its capacity in June when demand for steel products began improving following COVID-19 related lockdowns.
Ahmsa has lost more than three-thirds of its share capital, which accordingly to the Mexican Law of Mercantiles Societies, could result in the dissolution of the company, the steelmaker said in its Q3 2020 earnings on Oct 28, adding that it would be looking for financing options and capitalization alternatives to improve this situation.
Mexico, the second-largest crude steel producer, increased its crude steel output by 1.1pc to 1.47mn mt in October this year, from 1.45mn mt produced in the same month of 2019.