Gov't favors Swiss firm to take over Nat'l Steel

Government is supporting the bid of Swiss firm Duferco Inc. to acquire controlling interest in debt-saddled National Steel Corp. (NSC). The Swiss company has already initiated talks with Malaysian owners Hottick Holdings Inc.

This developed even as two Russian firms expressed interest in investing in the financially troubled steel firm.

A top trade official told reporters that Duferco has escalated its efforts to buy into NSC by initiating talks directly with Hottick instead of confining negotiations to NSC's creditor banks.

The official made this disclosure within days of the announcement by the Paris-based Pentium Group that it has completed the buyout offer and financing arrangements to purchase NSC in conjunction with the DLJ Group in New York.

But, Alfredo Lim, NSC's legal counsel said the company is now talking to the two Russian companies and expects to close a deal within the next three to four weeks.

Lim made the disclosure in a hearing at the Securities and Exchange Commission (SEC) where the firm asked to be given another 30-day extension of its suspension of debt payments or until March 18.

"There is nothing solid here," the DTI official said. "Duferco is the most serious group we have met so far and we think this is the best deal because it has access to supply that NSC needs to continue operating."

Duferco is known as a steel trading firm, but has also signed a contract for a joint-venture steel rolling plant in South Africa which was expected to process 650,000 tons of steel annually.

Represented in the Philippines by Swiss banking giant Credit Agricole, the official said Duferco was scheduled to meet with Hottick officials sometime this week to discuss the terms of acquisition.

According to the official, Duferco is moving fast for fear of the continued deterioration of NSC's plant and facilities since it closed down in November last year.