Danaharta wants say in major decisions involving NSC

Malaysian debt rehabilitation agency Pengurusan Danaharta National Berhad wants to have voting rights in any future "corporate life-changing" decisions that may be undertaken by the new majority owners of debt-laden National Steel Corp. (NSC) before it agrees to accept a debt write-down in the steel firm.

"Danaharta is willing to accept a debt write-down only if the new majority owners of NSC will give it equal voting rights in certain specific corporate acts that would involve, for instance, the sale of assets or a change in nature of business," industry sources disclosed yesterday.

Government has been working with creditor banks of NSC and Danaharta to settle their dispute over the P16 billion debt of NSC.

Danaharta took over the holdings of the Hottick-Renong group in NSC last year when it failed to pay a 3-billion-ringgit loan from Malayan Banking, RHB Bank, Bank Bumiputra and Commerce Assetholding Bhd.

Hottick-Renong used the loan to bail out the original Malaysian owners of NSC, the Westmont group.

Following a major rehabilitation and restructuring of Malaysian banks at the height of the Asian financial crisis, the Malaysian holding firm Danaharta eventually got control of the NSC shares.

Sources said in a possible compromise solution to the debt problem of NSC, the creditor banks and Danaharta will have to agree to a debt write-down or "haircut."

They said local creditor banks are reportedly agreeable to a write-down but Danaharta is still seeking some concessions.

"In accepting a haircut, Danaharta will lose majority control in NSC, while the banks could convert some of their debt into equity in the steel firm, thus tipping majority control in the banks’ favor," the sources said.