NSC shareholders to form SPV

The shareholders of National Steel Corp. will have to create a special purpose vehicle before the assets of the steel company can be liquidated or sold through public bidding, a reliable source said yesterday.

"President Macapagal-Arroyo is very anxious to reopen NSC’s operation in Iligan to provide employment," the source said, NSC closed in November 1999.

Incorporating a special purpose vehicle with the Securities and Exchange Commission will take place after the signing of a shareholders agreement which will convert NSC’s outstanding debt of P16 billion into equity. Against this debt, NSC has assets of P30 billion.

"Right now, we don’t know how much of a dilution each stockholder will have to take. What is sure is that the creditor-banks will be part of the agreement," the source said.

With an 80-percent stake, NSC’s biggest investor is Malaysian company, Pengurusan Danaharta Nasional Nhd. Government holds a 12-percent stake through the National Development Co. as well as loan exposures through government financial institutions, Development Bank of the Philippines and Land Bank of the Philippines.

One of the priorities of the NSC special purpose vehicle is to choose the best lease and rehabilitate proposal for the Iligan plant.

Proposals have been submitted by two Filipino companies, Allengoal Steel Trading and Fabrication Corp. and Cathay Pacific Steel Co. as well as by Voest Alpine of Austria.

The proposal of off-and-on bidder, Glencore International AG, an American-German company which has bought into Philippine Associated Smelting and Refining (PASAR) is also being studied.