STEEL RSTRCTRNG

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The Steel Restructuring Project aims to help finance the foreign exchange cost of a major restructuring and policy reform program, which consists of three parts, for the Mexican steel industry. Part A is tied to implementation of price decontrol, trade reform and presentation of a Global Steel Sector Policy Statement to expose the industry to international competition. It intends to finance eligible raw material and steel product imports during the adjustment period. Part B provides financing for the SIDERMEX restructuring program comprising the physical rehabilitation of the Altos Hornos de Mexico S.A. (AHMSA) steel works and rehabilitation and restructuring of SIDERMEX Mining operations. It also provides assistance in corporate-wide organizational and financial restructuring and for development of SIDERMEX's long-term strategy. Lastly, Part C supports the restructuring effort of HYLSA S.A. in the modernization of its flat products facility, in parallel with the financial restructuring package under negotiation with creditor banks.