Mexican Co.'s Debt Yo-Yo's As Chairman Is Arrested, CEO Replaced
Altos Hornos de Mexico's (Ahmsa) bank debt's levels have been yo-yoing on news of former Chairman Xavier Autrey's arrest last week in Spain and the replacement of CEO William Bricker with a company veteran.
Altos Hornos de Mexico's (Ahmsa) bank debt's levels have been yo-yoing on news of former Chairman Xavier Autrey's arrest last week in Spain and the replacement of CEO William Bricker with a company veteran. Autrey was reportedly arrested at the request of Mexican authorities on charges of tax fraud. Reportedly, Bricker was replaced in reaction to the arrest of the former chairman.
When Bricker, a former chairman of bankrupt steel maker LTV, was hired last April, positive expectations caused the levels to rise to the mid 20s from the 11-12 context. The debt traded fairly actively before settling in the low 20s, said a trader. This week, Ahmsa's price went back to the 18-20 level, he noted. The Mexican steel manufacturer's debt was quoted in the 21-22 context before the news of the arrest and replacement came out, he added. Market participants said the debt is largely owned by a group of emerging market distressed hedge funds. The buyer's names could not be determined.
Ahmsa went bankrupt in 1999, but negotiations with creditors have not come near an acceptable conclusion. The steel company has liabilities of about $1.8 billion out of which approximately $1.3 billion is bank debt. Approximately three-quarters of this has traded from its 50 original lenders, which included Citigroup's Banamex and Banco Bilbao Vizcaya Argentaria, a trader noted.
Autrey fled the country last April. Though he had been the previous ceo of a restructured steel company in the U.S., Bricker was let go to remove any sense of having an outsider coming into the negotiations with creditors, another trader explained. Officials at Ahmsa could not be reached.