SEC Filing Summary: Ternium S.A. (Form 6-K)
Business Context and Reporting Period
This Form 6-K, dated March 21, 2018, serves as a notice of the Annual General Meeting of Shareholders and an Extraordinary General Meeting of Shareholders for Ternium S.A., a Luxembourg-based steel producer. The meetings are scheduled for May 2, 2018, in Luxembourg. The filing includes the meeting agenda, proxy statement, and draft amendments to the Company's consolidated by-laws. The financial reporting period referenced for approval is the fiscal year ended December 31, 2017.
Key Financial Metrics
The filing provides specific financial figures related to the proposed dividend and historical profitability, though it does not detail current period revenue, cash flow, or debt levels within this specific document.
- Consolidated Profit (2017): USD 1,022,925,741 (as per consolidated financial statements).
- Annual Accounts Result (2017): The filing notes a loss for the year ended December 31, 2017, in the Company's annual accounts, which will be absorbed by retained earnings.
- Proposed Dividend: USD 0.11 per share (USD 1.10 per ADR), payable on May 10, 2018.
- Total Dividend Payout: Approximately USD 216 million (specifically USD 215,938,445.36 net of Treasury Shares).
- Share Capital: USD 2,004,743,442 (2,004,743,442 shares issued and outstanding).
- Treasury Shares: 41,666,666 shares held by the Company (voting rights suspended).
- Legal Reserve: Already equals 10% of subscribed capital; no further mandatory allocation required.
Note: Specific values for revenue, operating margins, total debt, and liquidity ratios are not provided in this filing text. Investors should refer to the 2017 Annual Report referenced in the document for these details.
Material Changes and Governance Actions
The filing outlines several material governance changes and shareholder actions:
- Dividend Declaration: Despite a reported loss in the annual accounts, the Board proposes a dividend funded by retained earnings due to the consolidated profit and available distributable reserves.
- Board Composition: Proposal to re-elect the current eight-member Board of Directors, including three independent directors who serve on the Audit Committee.
- Director Compensation: Proposal to approve USD 115,000 per director, with additional fees for the Chairman (USD 295,000) and Audit Committee members (USD 55,000).
- Auditor Appointment: Re-appointment of PricewaterhouseCoopers (Luxembourg member firm) for the fiscal year ending December 31, 2018, with fees capped in eleven currencies.
Guidance, Outlook, and By-Law Amendments
The Extraordinary General Meeting will vote on amendments to the Articles of Association to align with Luxembourg law and regulated market requirements:
- Audit Committee (Article 11): Strengthening requirements for independence and defining duties regarding financial statement integrity, auditor oversight, and related-party transactions.
- Meeting Logistics (Articles 15 & 16): Clarifying that meetings must occur within six months of the fiscal year-end and updating notice procedures to allow for electronic publication rather than mandatory mail.
- Voting and Quorum (Article 19): Adjusting procedures for convening a second meeting if quorum is not met at an Extraordinary Meeting.
- Appraisal Rights (Article 22): Updating references to Luxembourg commercial company law regarding shareholder appraisal rights.
- Liquidation (Article 24): Updating references to liquidation powers under Luxembourg law.
Outlook: The filing does not contain specific forward-looking guidance on steel demand, pricing, or production volumes for 2018. Management commentary is limited to the rationale for the dividend and the necessity of the by-law amendments.
Investor Verification Checklist
- Dividend Funding: Verify the source of the dividend payment (retained earnings) given the discrepancy between the consolidated profit and the annual account loss.
- Voting Deadlines: Confirm the record dates: April 27, 2018, for registered shareholders and April 2, 2018, for ADR holders.
- By-Law Impact: Review the full text of the proposed by-law amendments to understand changes to shareholder rights, specifically regarding appraisal rights and meeting notices.
- Full Financials: Access the 2017 Annual Report (available on the company website) to review detailed revenue, EBITDA, debt levels, and cash flow statements not included in this summary.
- Board Independence: Confirm the independence status of the three Audit Committee members as defined in the new Article 11.