Autlan, Bachoco Take Derivatives Hit

Mexico’s Minera Autlan says it is paying off debt and looking to save money to minimize its risk amid the global financial crisis. The company said it will begin paying off $30m in debt starting in January. It expects to be done in three years, it said. Also, the miner said it expects to take a charge of $25m in the fourth quarter as a result of the cancellation of derivative structures. An additional $15m could be charged in the medium to long term, the company said. Autlan added that Ebitda stands at about $180m, which makes the company liquid enough to comply with its commitments. It also said its income is in US dollars, which it said protects the company from the devaluation of the local currency. Autlan recently called off a sale, amid talks that bids for the manganese miner dropped too low for the seller. Elsewhere, Mexican poultry producer Industrias Bachoco says it has lost $50m because of recent worldwide volatility in financial markets. Most of the mark-to-market loss on derivatives positions is spread over the rest of the year and first half of 2009. “Our solid financial structure is allowing us to deal with the present situation and meet all of our financial commitments,” says Cristobal Mondragon, Bachoco’s CEO. The pair follows a rash of similar losses from Mexican corporates including Vitro, Gruma and Posadas. Analysts expect more of the same.