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/SECOND AND FINAL ADD -- NY091 -- TUBOS DE ACERO DE MEXICO, S.A./

 NOTE 6. Long-term Debt
 Long term debt at March 31, 1993 and 1992, consisted of:
 3/31/93 3/31/92
 Mexican US$ Mexican US$
 new pesos new pesos
 Floating rate notes,
 maturing in semi-annual
 installments from :
 1992 through 1999. NP 82,300 $ 26,603 NP 99,324 $ 29,323
 Notes payable to bank,
 maturing in semi-
 annual installments:
 From 1992 through 1999 95,812 30,970 115,631 34,137
 Revolving credits
 maturing in: 1999 78,309 25,313 98,440 29,063
 Notes payable to Mexican
 bank maturing in 1992 -- -- 111,778 33,000
 Notes payable to Mexican
 financial institution
 maturing in semi-annual
 installments from 1993
 through 1995 98,998 32,000 108,390 32,000
 Convertible debenture
 due 1997 154,685 50,000 169,360 50,000
 Medium term notes
 maturing in 1995 154,685 50,000 169,360 50,000
 Medium term notes
 maturing 1999 61,874 20,000 67,744 20,000
 Financial leasing
 contract with semi-
 annual payments from
 1993 to 1997 23,203 7,500 -- --
 Notes payable to Mexican
 financial institution
 maturing in semi-annual
 installments from 1991
 through 1994 11,601 3,750 21,170 6,250
 Other notes payable 19,254 6,224 6,224 1,837
 Total 780,721 252,360 967,421 285,610
 Less current portion (52,678) (17,029) (153,646) (45,360)
 Total 728,043 235,331 813,775 240,250
 US $30,230 in the form of floating rate notes and US $35,193 in notes payable to the Export-Import Bank of the United States are payable in the following manner:
 -- The first two installments to be paid in 1993 each equal to three percent of the principal amount.
 -- Thirteen installments in an amount equal to six percent of the principal amount, and
 -- A final installment as of Aug. 5, 1999, in an amount equal to the then unpaid principal amount of these two obligations (16 percent).
 US $30,000 in the form of revolving credits are payable to a Mexican financial institution in 32 equal quarterly installments beginning February 1992, each payment equivalent to 3.125 percent of the total amount.
 On June, 12, 1991, the company issued $50 million principal amount of debentures. The debentures may be converted at the option of the holder, into shares of common stock of the company or American Depositary Receipts (ADRs) evidencing American Depositary Shares (ADSs). The conversion rate will be approximately 85.1063 shares of common stock for each US $1,000 principal amount of debentures, subject to adjustment under certain circumstances. The company may redeem the debentures, in whole or in part, at specific prices, on any date, if the average of the high and low sale price of the company's common stock on the Mexican Stock Exchange or of the company ADSs on the American Stock Exchange (or such other national securities exchange in the United States on which the ADSs may then be listed or, if not so listed, as quoted in the National Association of Securities Dealers Automated Quotation System (NASDAQ), has been equal to or greater than 140 percent, of the then current conversion price for any 20 consecutive trading days ending within 5 trading days of the date of the company's notice of its intent to redeem. The maturity date of the debentures is June 12, 1997. The debentures bear interest at a rate of 7.50 percent per annum. Payments of interest and any premiums paid with respect to the debentures is subject to a 15 percent Mexican withholding tax. The company will pay additional amounts in respect of such withholding tax on interest payments, but may elect to redeem the debentures prior to maturity, in whole but not in part, in the event of certain changes affecting Mexican taxes or resulting in the company being obligated to pay Mexican withholding tax at a rate in excess of 20 percent unless the holder of a debenture at that time elects to absorb the withholding tax in excess of 20 percent.
 On Jan. 21, 1992, a global program was established for the issuance of notes up to $125,000 with maturities from 1 to 7 years and variable interest rate. To finance the payment of bank loans maturing in 1992, on January 30 of this year notes in the amount of US$50 million were issued under the global program. The notes bear a 9.75 percent annual interest rate, were issued at 99.54 percent of face value and their maturity date is Jan. 30, 1995. An additional amount of $20 million was issued on March 10, 1992 maturing in 1999 bearing a 10.53 percent annual interest rate.
 Minimum payments due on long-term as per the loan agreements in each of the next five years based on March 31, 1993 exchange rate are as follow: 1993 NP 57,413; 1994 NP 63,086; 1995 NP 279,335; 1996 NP 43,471 and 1997 NP 198,127.
 The loan agreements, among other things, impose certain covenants: maintenance of certain levels of net worth and working capital; maintenance of certain ratios of debt to net worth; restriction on the payment of cash dividends (see note 8); incurrence of additional debt and debt service. The company is in compliance with such covenants.
 7. Contingent Liabilities and Commitments
 The company is contingently liable for employee severance compensation as explained in Note 3D.
 8. Capital Stock and Restrictions on Shareholders' Equity
 Capital stock as of March 31, 1993 and 1992 consisted of 55,815,000 shares issued and outstanding, of no par common stock. In 1991, 13,000,000 shares were issued and 7,000,000 shares were held in treasury for conversion of debentures. All shares carry identical rights and obligations.
 In accordance with article 6 of the company's Articles of Incorporation the subscribed and paid-in capital stock as of Dec. 31, 1992, was in the amount of NP 967,500 and consisted of common shares with no par value, analyzed as follows:
 Issued
 Held in
 treasury for
 conversion of
 Authorized debentures Outstanding
 First series 55,815,000 -- 55,815,000
 Second series 7,000,000 7,000,000 --
 Total 62,815,000 7,000,000 55,815,000
 Less shares owned
 by Tamsider, S.A.
 de C.V., a subsidiary
 of the company
 eliminated for
 consolidation
 purposes from
 shareholders
 equity (1,000,000)
 Total 54,815,000
 The consideration for the stated capital at March 31, 1993 and 1992, expressed in Mexican new pesos with purchasing power as of March 31, 1993 was as follows:
 1993
 Shares New Pesos
 Cash 10,755,740 886,510
 Capitalization of property
 revaluation in 1954 20,000 36
 Capitalization of reinvested
 earnings, subject to income
 tax if shares are redeemed 834,556 1,478
 Capitalization of appreciation
 from appraisal of property,
 plant and equipment 15,389,704 27,296
 Capitalization of accumulated
 excess of monetary and
 non-monetary gains -- 521,933
 Shares issued in exchange
 for long-term debt 28,815,000 1,003,065
 Total outstanding capital stock 55,815,000 2,440,318
 Under the terms of the long-term agreements, the company may not pay cash or in kind dividends through 1999 unless, among other things, certain sinking fund requirements are met.
 Any cash or in-kind distribution of shareholders' equity in excess of P163,702 is subject to 35 percent Mexican withholding tax.
 In accordance with the "General Corporate Law" (Ley General de Sociedades Mercantiles), the legal reserve at historical value (NP 28,880 at March 31, 1993) must be increased by 5 percent of annual net earnings until it reaches 20 percent of the historical value of the outstanding capital stock amount. This reserve is not available for dividends, but may be used to reduce a deficit or may be transferred to stated capital. In accordance with the company's by-laws, other capital reserves may be increased at the shareholders' option.
 9. Income Tax
 No income tax expense was recorded in the years ended Dec. 31, 1992 and 1991 since a loss was determined after the effects of permanent and timing differences. The income tax expense for the years ended Dec. 31, 1992 and 1991 was different from the normal tax rate on income before income tax, due to the following:
 1992 1991
 Earnings before income taxes,
 compulsory profit sharing, tax
 on net assets & extraord. item NP (65,973) NP 166,442
 Add (Deduct):
 Permanent differences:
 Depreciation (41,880) (977)
 Result from monetary position (3,101) (56,923)
 Adjustments for inflation 1,548 448
 Other 35,285 34,590
 (8,148) (22,862)
 Timing of differences (19,409) (318,702)
 Tax earnings (losses) NP (93,530) NP (175,122)
 Income tax NP -- NP --
 Under Mexican accounting principles timing differences aggregating NP 501,276 will be treated as non-deductible items when computing income tax of future years in which they will be charged to income since no deferred liabilities were accrued because such differences originated in years which the company incurred losses for tax purposes. Additionally, the following tax losses may be carried forward against taxable income of future years after an adjustment procedure:
 Originated in Taxes losses Right to carry
 adjusted amount forward expires in:
 1987 NP 2,270,864 1992
 1988 96,265 1993
 1989 248,568 1994
 1990 5,297 1995
 1991 129,456 1996
 1992 139,885 1997
 The company's subsidiary operating in the United States incurred in 1992 net operating loss of approximately $1.8 million. It has net operating loss carryforwards in the United States of $7.5 million of which $0.5 million expires in the year 2000, $3.495 in the year 2001, $1.725 in the year 2006, and $1.8 in 2007.
 During 1989, the Mexican government instituted a minimum 2 percent tax on net assets. This tax (NP 6,194 in 1993 and NP 2,684 in 1992), is creditable against the income tax payable in the same year of the following five years.
 Note 10: Other Information
 Following are details of certain amounts included in the consolidated statements of financial position at March 31, 1993 and 1992:
 1993 1992
 Accounts and notes receivable:
 Customers NP 251,308 NP 382,552
 Officers and employees 2,485 10,963
 Other accounts 8,567 5,722
 NP 262,360 399,237
 Inventories:
 Raw materials NP 71,043 NP 89,015
 Finished & in process products 125,614 165,279
 Accessories spare parts
 and general store 279,765 322,249
 NP 476,422 NP 576,543
 Other accounts payable and
 accrued expenses:
 Interest & commission payable NP 38,736 NP 43,639
 Taxes payable (2,243) (1,394)
 Other accounts payable 19,102 11,560
 Advances from Pemex -- 107,257
 Total NP 55,595 NP 161,062
 -0- 5/3/93 AB NY091
 /PRNewswire -- May 3/
 /SECOND AND FINAL ADD/


CO: Tubos de Acero de Mexico, S.A. ST: IN: MNG SU: ERN

LD-OS -- NY091B -- 4075 05/03/93 20:47 EDT
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Date:May 3, 1993
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