SEC asks for MOA between Hottick, NSC creditors

The Securities and Exchange Commission has directed the liquidator of National Steel Corp. to submit the memorandum of agreement signed by the steel firm’s Malaysian shareholders and creditors to enable it to formally approve the MOA and dismiss all the pending incidents to ensure an orderly resumption of NSC’s operations.

SEC Chairperson Lilia R. Bautista said the signing of the MOA paves the way for the dismissal of all pending suits or issues lodged before the commission.

Bautista said Danilo Concepcion, the government-appointed liquidator for NSC, has committed to file the MOA executed by NSC creditors and controlling owner Hottick Investments Ltd. "He would still have to file it with the SEC so we can approve it," she said.

Since it ceased operations in November 1999, NSC has been the subject of various legal actions and processes between Hottick and creditor banks, all of which have contributed to the delay in the resumption of the steel giant’s interim operations.

Hottick and the creditor-banks could not get themselves to agree on issues involving the lease of NSC’s mothballed facilities, outright sale of the company or the liquidation of the firm’s assets. Hottick had junked rehabilitation proposals submitted by the receivership committee and creditor-banks without even offering any alternative.

Bautista said the SEC would leave it up to the new company whether it would be lease or sale for NSC. She said the new NSC’s task is to ensure that the Iligan plant resumes operations at the soonest possible time and prevent further deterioration of the facilities.

Once the MOA is implemented, creditor-banks will take control of NSC with an 80 percent stake. This will bring down to 20 percent the stake of Hottick in the local steel firm from 82.5 percent.

The government’s shares in NSC will be pro-rata reduced. The government owns about 10 percent of the local steel maker through state holding firm National Development Co. (NDC).

The plan also involves the transfer of all NSC assets to a special purpose vehicle which will then issue shares of stock. Assets of the steel manufacturer have been estimated at more than P20 billion.

The next step would be to start preparing the terms of reference on the sale or lease of NSC’s mothballed facilities to jumpstart the plant’s operations. – Zinnia dela Peña