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INVESTMENTS IN NON-CONSOLIDATED COMPANIES
 12 Months Ended
Dec. 31, 2022
Disclosure of interests in other entities [Abstract]  
INVESTMENTS IN NON-CONSOLIDATED COMPANIES INVESTMENTS IN NON-CONSOLIDATED COMPANIES
As of December 31,
20222021
At the beginning of the year751,475 471,306 
Equity in earnings of non-consolidated companies37,114 400,732 
Other comprehensive income48,475 (38,441)
Dividends from non-consolidated companies(15,493)(82,122)
At the end of the year821,571 751,475 

The principal investments in non-consolidated companies, all of which are unlisted, except for Usiminas, are:
Country of incorporationMain activityVoting rights atValue at
December 31, 2022December 31, 2021December 31, 2022December 31, 2021
Usinas Siderurgicas de Minas Gerais S.A. - USIMINASBrazilManufacturing and selling of steel products34.39 %34.39 %725,705 681,711 
Techgen S.A. de C.V.MexicoProvision of electric power48.00 %48.00 %90,559 64,140 
Other non-consolidated companies (1)5,307 5,624 
821,571 751,475 
(1)     It includes the investment held in Finma S.A.I.F., Recrotek S.R.L. de C.V. and Gas Industrial de Monterrey S.A. de C.V.
(a)Usinas Siderurgicas de Minas Gerais S.A. – USIMINAS
As of December 31, 2022, Ternium, through its subsidiaries, owns a total of 242.6 million ordinary shares and 8.5 million preferred shares, representing 20.40% of the issued and outstanding share capital of Usinas Siderurgicas de Minas Gerais S.A. – USIMINAS (“Usiminas”), the largest flat steel producer in Brazil for the energy, automotive and other industries.

Ternium, through its subsidiaries, together with Tenaris S.A.’s Brazilian subsidiary Confab Industrial S.A. (“TenarisConfab”), are part of Usiminas’ control group, comprising the so-called T/T Group. As at December 31, 2022, the Usiminas control group holds, in the aggregate, 483.6 million ordinary shares bound to the Usiminas shareholders’ agreement, representing approximately 68.6% of Usiminas’ voting capital. The Usiminas control group, which is bound by a long-term shareholders’ agreement that governs the rights and obligations of Usiminas’ control group members, is currently composed of three sub-groups: the T/T Group; the NSC Group, comprising Nippon Steel Corporation (“NSC”), Metal One Corporation and Mitsubishi Corporation; and Usiminas’ pension fund Previdência Usiminas. The T/T Group holds approximately 47.1% of the total shares held by the control group (39.5% corresponding to the Ternium entities and the other 7.6% corresponding to TenarisConfab); the NSC Group holds approximately 45.9% of the total shares held by the control group; and Previdência Usiminas holds the remaining 7%.
13.    INVESTMENTS IN NON-CONSOLIDATED COMPANIES (continued)

The corporate governance rules reflected in the Usiminas shareholders agreement provide, among other things, that Usiminas’ executive board will be composed of six members, including the chief executive officer and five vice-presidents, with Ternium and NSC nominating three members each. The right to nominate Usiminas’ chief executive officer alternates between Ternium and NSC at every 4-year interval, with the party that does not nominate the chief executive officer having the right to nominate the chairman of Usiminas’ board of directors for the same 4-year period. The Usiminas shareholders agreement also provides for an exit mechanism consisting of a buy-and-sell procedure—exercisable at any time after November 16, 2022 and applicable with respect to shares held by NSC and the T/T Group—, which would allow either Ternium or NSC to purchase all or a majority of the Usiminas shares held by the other shareholder.

As of December 31, 2022, the closing price of the Usiminas ordinary and preferred shares, as quoted on the BM&F Bovespa Stock Exchange, was BRL7.41 (approximately $1.42; December 31, 2021: BRL14.51 - $2.60) per ordinary share and BRL7.16 (approximately $1.37; December 31, 2021: BRL15.16 - $2.72) per preferred share, respectively. Accordingly, as of December 31, 2022, Ternium’s ownership stake had a market value of approximately $356.2 million ($653.9 million as of December 31, 2021) and a carrying value of $725.7 million ($681.7 million as of December 31, 2021).
As of December 31, 2022 and 2021, the value of the investment in Usiminas is comprised as follows:
USIMINAS
Value of investmentAs of December 31, 2022As of December 31, 2021
At the beginning of the year681,711 422,948 
Share of results (1)130,696 379,067 
Other comprehensive income48,145 (38,680)
Dividends(14,487)(81,624)
Impairment charge (note 3 (f))(120,360)— 
At the end of the year725,705 681,711 
(1) It includes the adjustment of the values associated to the purchase price allocation.
The investment in Usiminas is based in the following calculation:
Usiminas' shareholders' equity4,437,784 
Percentage of interest of the Company over shareholders' equity20.40 %
Interest of the Company over shareholders' equity905,444 
Purchase price allocation56,255 
Goodwill199,213 
Impairment(435,207)
Total Investment in Usiminas725,705 
On February 10, 2023, Usiminas issued its annual accounts as of and for the year ended December 31, 2022.
13.    INVESTMENTS IN NON-CONSOLIDATED COMPANIES (continued)
Summarized balance sheet (in million $)As of December 31, 2022As of December 31, 2021
Assets
Non-current3,764 3,491 
Current2,930 2,325 
Other current investments413 75 
Cash and cash equivalents559 1,184 
Total Assets7,666 7,075 
Liabilities
Non-current508 477 
Non-current borrowings1,163 1,098 
Current1,009 1,104 
Current borrowings25 31 
Total Liabilities2,705 2,710 
Non-controlling interest523 468 
Shareholders' equity4,438 3,897 
Summarized income statement (in million $)Year ended December 31, 2022Year ended December 31, 2021
Net sales6,297 6,270 
Cost of sales(5,187)(4,168)
Gross Profit1,110 2,102 
Selling, general and administrative expenses(237)(199)
Other operating income (loss), net(386)197 
Operating income487 2,100 
Financial expenses, net114 158 
Equity in earnings of associated companies43 41 
Profit (Loss) before income tax644 2,299 
Income tax benefit(231)(426)
Net profit (loss) before non-controlling interest413 1,873 
Non-controlling interest in other subsidiaries(93)(185)
Net profit (loss) for the year320 1,688 
(b)Techgen S.A. de C.V.
Techgen is a Mexican natural gas-fired combined cycle electric power plant in the Pesquería area of the State of Nuevo León, Mexico. The company started producing energy on December 1, 2016 and is fully operational. As of February 2017, Ternium, Tenaris, and Tecpetrol International S.A. (a wholly-owned subsidiary of San Faustin S.A., the controlling shareholder of both Ternium and Tenaris) completed their investments in Techgen. Techgen is currently owned 48% by Ternium, 30% by Tecpetrol and 22% by Tenaris. Ternium and Tenaris also agreed to enter into power supply and transportation agreements with Techgen, pursuant to which Ternium and Tenaris will contract 78% and 22%, respectively, of Techgen’s power capacity of 900 megawatts.
Techgen stated in its unaudited annual accounts as of and for the year ended December 31, 2022, that revenues amounted to $580 million ($419 million as of December 31, 2021), net profit from continuing operations to $55 million ($45 million as of December 31, 2021), non-current assets to $766 million ($791 million as of December 31, 2021), current assets to $131 million ($91 million as of December 31, 2021), non-current liabilities to $527 million ($614 million as of December 31, 2021), current liabilities to $181 million ($134 million as of December 31, 2021) and shareholders’ equity to $189 million ($134 million as of December 31, 2021).
During 2017 and 2016, Techgen’s shareholders made additional investments in Techgen, in the form of subordinated loans, which in the case of Ternium amounted to $126.8 million as of December 31, 2022, and which are due in June 2026.
13.    INVESTMENTS IN NON-CONSOLIDATED COMPANIES (continued)
On February 2019, Techgen S.A. de C.V. entered into syndicated loan agreement with HSBC Mexico, Natixis, Credit Agricole, BNP, Santander, Intesa SP and Norinchukin (the “Syndicated Loan”), according to the following terms: (i) Libor + 170 bps; (ii) maturity on February 13, 2026; (iii) average life 4.30 years; and (iv) guaranteed by: assets, shares, a debt service reserve account - which represents 10% of the outstanding amount- and the fix capacity charge cash-flow.

On August 5, 2021, Ternium Investments completed the purchase of a participation in this Syndicated Loan for an amount of $68 million. As of December 31, 2022, the outstanding syndicated loan amount was of $344 million and Ternium Investments’ participation was of $51 million.

For commitments from Ternium in connection with Techgen, see note 24.