NSC sale to GIHL not final?

The sale of National Steel Corp. (NSC) to Global Infrastructure Holdings Ltd. (GIHL) is still not final until all of the definitive agreements are signed, according to NSC creditor-bank sources.

Sources warned that GIHL "is taking a risk in rehabilitating the plant and operating it. If the creditors and GIHL do not come to terms, we will not reimburse them for what they have spent."

Even though the creditor-banks of NSC and GIHL had signed a memorandum of agreement (MOA) last Jan. 29, creditor-bank sources explained that the MOA merely lays out the commercial terms of the agreement.

However, creditor-banks and GIHL still have to agree and sign several other definitive agreements which include an asset purchase agreement, a purchase price sharing agreement, a profit-sharing agreement as well as an agreement for a standby letter of credit.

Additionally, documents of agreement from the other shareholders of NSC such as Pengurusan Danaharta of Malaysia, are also needed as well as an agreement with the local government of Iligan City to waive all past due taxes on NSC.

Furthermore, a Bangko Sentral ng Pilipinas (BSP) approval is also needed allowing the deal to be eligible under the SPAV Law.

The creditor banks and GIHL, likewise, have to agree that all legal cases must be resolved before the final signing of the definitive agreements.

A technical deadline for the signing of the definitive agreements has been set for April 29 this year.

Until then, creditor-banks warned, the agreement can still fall apart unless all the conditionalities are met.

The secured creditors who signed the MOA included the Philippine National Bank, represented by its president and chief executive officer Lorenzo V. Tan; China Banking Corp., represented by its president Cesar Lugtu; Land Bank of the Philippines, represented by its first vice president Cecile Borromeo; and Rizal Commercial Banking Corp., represented by its vice president Angela Tinio. GIHL was represented by its principal, Pramod Mittal.