BSP pushes sale of National Steel

The Bangko Sentral ng Pilipinas (BSP) is urging the National Steel Corp. (NSC) and its creditor-banks to finalize a decision on the sale of the steel firm.

BSP Governor Rafael Buenaventura told reporters over the weekend the sale of NSC and the restructuring of its loans will benefit the local banking industry.

"Looking at it from the industry standpoint, the restructuring of NSC’s obligations will improve the non-performing loans (NPL) ratio of the banking industry," Buenaventura said.

"That’s why we are waiting for this to be settled once and for all so we can get on with the restructuring," he added.

Sources said Global Infrastructure Holdings Ltd. (GIHL) is already in the last stages of closing a deal with creditor banks after almost 60 percent gave their formal notice of approval from their respective boards for the offer of GIHL.

According to a letter from Philippine National Bank (PNB) president and chief executive officer Lorenzo V. Tan to Danilo Concepcion who heads the NSC Management Committee, majority of the banks "have now approved the negotiated Term Sheet and the Memorandum of Understanding (MOA)."

The next course of action, Lorenzo said, is to convene the NSC Management Committee for a presentation on the salient terms and conditions of the MOA.

However, the LNM has been able to get to at least three of the creditor banks, namely China Bank, Credit Agricole Indosuez and the Export Industry Bank to appeal to the creditor-bank group to listen to the improved offer of LNM Holdings N.V.

Eric Tierie of LNM Holdings N.V. had said that he had met with the three banks last Thursday, Jan. 22, and that "they are considering the offer of LNM."

LNM has also apparently reached the Malaysian equity holders of NSC to give the LNM Group a chance to present it own offer for NSC.

Meanwhile, residents of Iligan City rallied behind government’s award of the (NSC) plant to Global Infrastructure Holdings, Ltd. (GIHL) as they pressed its immediate reopening.

NSC liquidator Danilo L. Concepcion, residents of Iligan said, should not be sidetracked by so-called improved offers belatedly foisted by a losing bidder, after GIHL won the bid with a P13.25-billion offer.

The sole liquidator of NSC announced that the memorandum of agreement (MOA) with GIHL will be signed once a 90-day enhancement period lapses as he ruled out any further offers. More than 60 percent of all creditors already accepted the GIHL MOA.

"The people of Iligan and the many towns around the NSC have been hoping for the reopening and operations of the plants," Iligan Mayor Franklin M. Quijano said.

"Many of our people suffered so much when jobs were lost. The local economy lost steam. Our talented and skilled people moved out of the city and towns. Education was stunted, social services started to wane," he recalled.

The county’s biggest steelworks were closed some four years ago under the weight of huge debts, but at its peak it had provided at least 3,000 jobs and pumped economic life to Mindanao.

"The effects of the shutdown were minimized only by the innovative approach of the local government and the Iliganon’s resiliency under pressure," Quijano said.

Former NSC workers who have been pushing for the plant’s immediate reopening are alarmed at persistent talks that a losing bidder could stall the rehabilitation of NSC by its reported resort to court action. Last month, workers sought the help of Securities and Exchange Commission Chairman Lilia Bautista to prod Concepcion to finalize the award.