Mexico’s steelmaker Altos Hornos de Mexico (Ahmsa), has started bankruptcy proceedings for two of its subsidiaries due to lack of liquidity.
The two subsidiaries, Minera del Norte, which produces iron ore and coal and Corporativo Industrial Coahuila which produces coal, are located in the northern state of Coahuila.
Ahmsa said in a statement on June 8 that the bankruptcy process will allow the companies to restructure and stabilize their operations and finances.
The subsidiaries’ financial challenges began after one of their largest clients, the Federal Electricity Commission (CFE), reduced the volume of coal purchases to 30pc and reduced prices, Ahmsa claimed. The two subsidiaries provides 7,000 direct jobs and 14,000 inderect jobs, Ahmsa said without disclosing further details.
In February this year, Ahmsa expressed interest in negotiating with other steelmakers to sell its steel operations to improve its financial position. According to media reports, Teching Group, Posco, China Baosteel, and Mexico’s long steel Grupo Villacero are interested in the acquisition.
Ahmsa’s production fell by 40pc in 2019 from an output of 4.52mn mt in 2018.