Malaysians agree to joint sale of NSC

The Malaysian owners of the National Steel Corp. (NSC) have agreed to a possible joint sale of the beleaguered steel firm, paving the way for the resolution of the firm’s financial woes.

Government sources said Pengurasan Danaharta Nasional Bhd, Malaysia’s debt rehabilitation agency, has agreed to a joint sale with Philippine creditors of NSC.

The sources said Danaharta is now willing to take a loss of its investments in the mothballed steel firm.

Danaharta assumed the holdings of several Malaysian banks in NSC.

The Malaysian banks – Malayan Banking, RHB Bank, Bank Bumiputra and Commerce Assetholding Bhd – earlier extended a three billion ringgit loan to Hong Kong’s Hottick Investments Co. which had taken over the initial investment of the Westmont Group in NSC.

It was Danaharta’s previous opposition to the sale and rehabilitation of NSC that had delayed negotiations between the creditors and owners.

The Department of Trade and Industry (DTI) has been trying to broker a compromise deal among the creditors and the Malaysian owners to resolve NSC’s problems and to enable it to reopen.

The DTI pointed out that the continued closure of NSC’s steel plant would lead to a deterioration of its assets.

There had been an interim proposal to allow the operation of NSC through tolling arrangements, but again all parties could not agree on who would be chosen to operate the mothballed plant.

The breakthrough in the Malaysian position, sources said, was made during the visit of President Arroyo to Malaysia.