SEC gives liquidator another 2 weeks to submit recommendations on NSC

The Securities and Exchange Commission (SEC) agreed to wait another two weeks for the liquidator of the National Steel Corp. (NSC) to make the formal recommendation on what to do with the company.

Negotiations are going on with the Malaysian government on the possible write-down of its $800-million exposure in NSC.

SEC Chairman Lilia Bautista said she met with NSC liquidator Danilo Concepcion who asked to be given at least two weeks to make his recommendation.

The Department of Trade and Industry earlier met with Malaysian officials in an attempt to convince them to write down part of Malaysia’s exposure in the company through its rehabilitation agency, the Pengurusan Danaharta Nasional Bhd.

Bautista said the SEC wants to know the recommendation of the official liquidator tasked to evaluate NSC’s options. Some creditor banks have been clamoring for the SEC to order the liquidation of NSC’s assets but there are those that remain open to the possibility of rehabilitation if the government could talk Danaharta into writing down its exposure and reducing the company’s total debt burden.

Bautista said she had recommended the liquidation of NSC shortly after it was forced to shut down its steel plant in Iligan, indicating that the company’s financial woes had gone way beyond any possible hope of rehabilitation.

Bautista said the main stumbling block to liquidation is that banks have to pay at least P1 billion in fees and charges just to be able to unload NSC’s salvageable assets.

The DTI had initiated what it called an "evaluation process," seen as a last-ditch effort to snare a willing investor into infusing fresh funds into NSC. To be able to do this, however, the company needs to look better than its current bedraggled state and this would require a drastic reduction in its total debt.