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Fwd: NSC's Malaysian owners seek review of Allengoal lease pact
By Kapal Berita
21/9/2000 6:18 pm Thu
NSC's Malaysian owners seek review of
Allengoal lease pact
PASIG CITY, (ABS-CBN) - The Malaysian owners of the
debt-ridden National Steel Corp. (NSC) said Tuesday
they are appealing to the firm's biggest creditor-bank,
Philippine National Bank (PNB), to reconsider its
lease agreement with Allengoal Fabrication & Trading
while in search for a long-term investor in the
NSC chair and executive director Ibrahim Bidin said
allowing Allengoal to lease NSC's facilities for
eight months will prevent its further deterioration.
The lease will also allow Allengoal to earn in the
form of lease payments which would also be used to
further maintain the firm's facilities.
Under the proposed lease agreement, Allengoal
offered more than P1 billion to lease the steel
firm's facilities for eight months.
Earlier, PNB, of which the steel firm has a loan
exposure of P5.6 billion, withdrew its support to
the agreement as it would not provide a long-term
program to ensure the viability of NSC's operations.
PNB also heads the steering committee.
The fate of the NSC, however, lies on the
alternative rehabilitation plan prepared by Hottick
Investments Ltd. which still needs the approval of
majority of NSC's creditors and the Securities and
Exchange Commission. Hottick owns 82.5% of the steel
On the other hand, Monico Jacob, head of NSC's
interim receiver committee, said that despite having
recommended the liquidation of the steel firm, the
SEC holds the final decision whether to reject or
accept the proposed alternative plan that will
presented by Hottick Investments.
"It's really up to the SEC. We can only recommend
but the SEC still has the last say," Jacob said.
Hottick has reportedly worked out a rehabilitation
plan for NSC with two unidentified potential
investors to keep the steel firm alive.
The firm earlier objected to the plan submitted by
the NSC's acting -receiver, saying it failed to
address the consensus of its stockholders and
favored NSC's domestic lenders.
The rehab plan drafted by the IRR called for: the
restructuring of NSC's P9-billion debt into 10-year
amortizing bonds; conversion of the remaining P7.5
billion of debt into equity; entry of a strategic
partner, preferably a slab producer; and infusion of
additional capital of $600 million to $1 billion
Furthermore, the SEC extended for another two weeks
or until September 30 the order freezing all actions
and claims lodged against NSC to enable Hottick to
file an alternative to the IRC-drafted
rehabilitation plan and for the IRC to submit the
liquidation plan for NSC.
However, SEC chair Lilia R. Bautista said this would
be the last time the Commission would extend the
suspension order unless NSC could justify its
"That will be the last. Either the Malaysians come
up with an acceptable plan or NSC undergoes
liquidation," she said.
NSC was the country's largest steel manufacturer
until it shut down its operations in Iligan City
last November due to financial troubles, which
started when the pledged capital infusion of
Malaysian investors Wing Tiek Group and Hottick
failed to materialize.
The steel firm's debts ballooned when it was forced to borrow from banks to continue its operations amid the entry of cheap steel imports from South Korea and Russia.
Link Reference : Sumber Rencana: Abs-Cbn News