CMI International, Inc., a Michigan Corporation - Page 3




                                        - 3 -                                         

               Petitioner is a Michigan corporation whose principal place             
          of business was in Southfield, Michigan, at the time the petition           
          was filed.  Petitioner manufactures machined-cast automotive                
          parts and is the parent company of a group of corporations that             
          in 1988 filed a consolidated corporate income tax return.                   
               In mid-1986, petitioner decided to build a plant in Mexico             
          that would supply parts to Ford Motor Company.  On June 5, 1986,            
          petitioner formed a wholly owned domestic subsidiary, CMI-Texas,            
          Inc. (CMI-Texas).  In turn, on June 13, 1986, CMI-Texas formed a            
          Mexican subsidiary, Industrias Fronterizas CMI, S.A. de C.V.                
          (Industrias), which issued 4,996 shares of class A stock to CMI-            
          Texas and one share of such stock to each of four individuals.              
          In late 1986, Industrias began construction of an industrial                
          plant in Nuevo Laredo, Tamaulipas, Mexico (Nuevo Laredo plant).             
               On April 30 and May 11, 1987, formal requests were made on             
          behalf of CMI-Texas and Industrias for authorization to engage in           
          a swap transaction to finance additional construction of the                
          Nuevo Laredo plant.  On August 7, 1987, the Mexican Government              
          approved the transaction, authorizing CMI-Texas to acquire an               
          interest in U.S.-dollar-denominated debt with a face value of               
          US$2,300,000.  On September 4, 1987, the Mexican Government                 
          approved a 15-percent discount rate, which would be used in                 
          calculating the amount of pesos to be transferred to Industrias.            
          The discount rate reflected an estimate of the proposed venture's           





Page:  Previous  1  2  3  4  5  6  7  8  9  10  Next

Last modified: May 25, 2011