Nat’l Steel creditors start talks with Ispat Global

Creditor banks of National Steel Corp. (NSC) have began negotiations with Ispat Global for the possible lease with option to purchase the mothballed steel firm in Iligan City, Davao.

This was announced yesterday by Trade and Industry Secretary Manuel Roxas II who said that there were three to four proposals to lease NSC, but only two "matured into documented serious bids."

However, Roxas said, the creditor committee is currently negotiating with Ispat Global.

He did not identify the other "serious" bidder.

Roxas admitted that there are some "gaps" between the two parties, "but I understand the gaps to be within reach."

He assured that the Derpartment of Trade and Industry would continue to "play a constructive role in bringing the parties together and we will do all we can to ensure the successful outcome of the negotiations."

Roxas did not disclose how much Ispat Global offered for NSC, but he said that "it was less than hoped for, but better than expected."

But even as the creditor banks negotiate with Ispat Global – Allengoal Steel Fabrication & Trading, which claims to have a rightful lease to NSC, indicated yesterday that it may seek a temporary restraining order (TRO) against any new lease negotiation.

Allengoal president Alex Delmo called for transparency in the said negotiation, especially since Allengoal has offered a cash component of P1 billion for NSC.

Allengoal last month had asked the Securities and Exchange Commission (SEC) for the immediate implementation of its lease agreement with the NSC executed on May 26, 2000.

In a letter to SEC Chairwoman Lilia R. Bautista, Delmo warned that if the lease agreement is not acted upon, Allengoal would be "constrained to seek all immediate legal remedies" to protect itself.

According to Allengoal, it entered into a lease agreement with the NSC a few months after the steel firm closed in November 1999 due to its P18-billion debt burden.