Therefore, we continue to recommend turning to other investment alternatives

Outlook

During the past years, the company implemented several unsuccessful strategies to overcome its difficult financial position. This, coupled with a competitive steel market, led the company to default on certain debt and interest payments during April 1999, and consequently declare itself in suspension of payments. In mid October, IMSA and GAN (the majority stakeholder of Ahmsa) agreed to form a strategic alliance between their subsidiaries IMSA Acero and Ahmsa. This association was conditional upon the restructuring of Ahmsa’s debt, as well as putting an end to the suspension of payments. However, negotiations fell thru as Ahmsa announced in late February 2000 that it had a better offer from Aceralia- a Spanish steel maker. Aceralia would take on US$ 1 billion of Ahmsa’s debt out of the US$ 1.9 billion at the end of 4Q99, and it would capitalize the Mexican company with US$ 400 million. If the strategic alliance is approved, Aceralia would hold a controlling stake in the alliance (51%).

We believe 2000 should be a good year for the company due to the positive perspectives in the global steel market. Steel prices continue to rebound, which combined with the good economic growth expected in Mexico during 2000 should allow for improvement in operating results. The company estimates EBITDA of US$ 320 million for 2000, a 38% increase compared to 1999.

Sumant Vasal: [e-mail]

The information contained herein has been obtained from sources that we believe to be reliable, but we make no representation as to its accuracy or completeness. Neither CASA DE BOLSA BANORTE, S.A. DE C.V. nor AFIN SECURITIES INTERNATIONAL accepts any liability for any losses arising from any use of this report or its contents.