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NSC may seek refuge from Malaysian govt tohalt its closure
By Kapal Berita
18/10/2000 11:14 pm Wed
Tuesday, October 17, 2000 02:54 AM ZE8
NSC may seek refuge from Malaysian govt to
halt its closure
PASIG CITY, (ABS-CBN) -- The possible closure of the
cash-strapped National Steel Corporation (NSC) could
hit another snag with the Malaysian government as
its Malaysian shareholders threaten to seek refuge
from the Malaysian authority if the Securities and
Exchange Commission (SEC) refuses to lift its order
for the liquidation of NSC's assets.
In a letter to the SEC, National Steel Labor Union
president Simplicio Villarta Jr. said he was
informed by NSC chair and executive director Ibrahim
Bidin that Hottick Investments Ltd., the Malaysian
owners of the ailing firm, said it will take all
necessary actions to prevent the firm from
"We had the opportunity to talk to Mr. Bidin that
Hottick will exhaust all available legal means to
stop the liquidation of NSC. And not only that, he
also insinuated that our overseas Filipino workers
in Malaysia might be sent home as was told to us by
then NSC chief operating officer Mr. Tom Galanis, "
To recall, the SEC wavered on issuing the order for
the NSC's dissolution as such move could involve
political repercussions, possibly straining
RP-Malaysian ties. The liquidation of the steel firm
was also seen to aggravate political and financial
woes besetting the country.
The SEC ordered the liquidation of NSC after the
company's Malaysian owners failed to file an
alternative plan to rehabilitate the ailing steel
maker. Hottick instead requested for additional time
to work out for NSC's rehabilitation plan since it
was still on talks with prospective partners.
The SEC, however, believes that "petitioner from the
time it was directed on Feb 28 to submit a more
detailed rehabilitation plan up to the last
extension of the suspension of payments order on
Sept 30, had all the time to iron out and finalize
its own rehabilitation plan."
Furthermore, the labor union stressed the SEC should
have consulted first NSC's major stockholders and
employees before it ordered the company's
It added that the receivership committee had failed
to help prevent the ailing firm from going into
dissolution proceedings. "For the past eleven
months, however, all that IRC said were nothing but
empty promises," Villarta said.
The union also expressed its suspicions over the
real motive of Monico Jacob, head of NSC's
receivership committee, in handling the case of NSC
considering his conflict of interest as a
shareholder of another giant company in the country.
Jacob is the former chairperson of Petron
"A sensible, intelligent and objective assessment of
the IRC-drafted rehabilitation plan will show
that... it was really designed to be rejected by any
thinking majority stockholder what with its highly
skewed provisions completely in favor of one party
and practically shutting out the other," "Villarta
Under the IRC-drafted rehabilitation plan, creditors
would convert half of their P16 billion in loans
into equity in NSC with the balance to be repaid
within 10 years after the steel giant resumes its
operations. Creditor-banks of NSC include Land Bank
of the Philippines, Allied Banking Corp,
Metropolitan Bank and Trust Co., Westmont Banking
Corp., Rizal Commercial Banking Corp. and
Meanwhile, Jacob who was also appointed liquidator
for NSC, informed SEC chair Lilia R. Bautista he is
currently studying the different proposals of six
investor groups that have signified interest to take
over NSC even after the liquidation order was handed
down by the agency.
The investor groups include an Arab-Chinese group,
another group represented by Citibank, US-based
companies together with a local group, London-based
consortium, Duferco, and Ispat.
The steel manufacturer was forced to seek debt relief after it shut down operations in November 1999, following a continued decline in sales due to the influx of cheap imported steel from Russia and South Korea. Its suspension of operations has driven 2,000 employees out of work.