NSC lot owner asks SEC to hold okay of GIHL deal

Land owner Teofilo Cacho has asked the Securities and Exchange Commission (SEC) to hold in abeyance its approval of the lease purchase agreement entered into by National Steel Corp. (NSC) winning bidder Global Infrastructure Holdings Ltd. (GIHL) and the steel firm’s creditors.

In his petition filed with the SEC, Cacho said the SEC should await the decision of the Quezon City Regional Trial Court on his pending request for the non-inclusion of his real estate properties in the assets to be disposed by NSC to the Indian conglomerate.

Cacho claimed that he owns two parcels of land in Iligan City totaling approximately 8.5 hectares currently occupied by NSC steel plant.

The Quezon City RTC has set the prayer for the issuance of a writ of preliminary injunction on May 18, Cacho said.

But GIHL and NSC creditors have agreed to extend for another 90 days the closing of a deal which would result in the Indian firm taking over Philippines’ biggest steel maker.

While the SEC is not opposed to the planned lease of the Iligan plant to GIHL, the terms of the agreement have yet to be scrutinized by the agency.

Under the memorandum of agreement between the creditors and GIHL, the winning bidder will pay the banks a total of P13.25 billion, of which P1 billion will be in cash and the remaining P12.25 billion will be paid in eight years.

The agreement calls for the lease of the NSC plant with an option to purchase it in three years‚ time.

Although GIHL had already won the right to NSC assets, creditors are asking for more concessions, specifically the grant of a shorter period for the repayment of loans. The agreement provided for a 10 to 12-year repayment period, but creditors want it reduced to as short as seven years.

At present, NSC’s creditors are spending between P5 million and P10 million a month just to maintain the Iligan City-based steel plant, with funding for maintenance expenses coming from the proceeds of the insurance taken out on the plant.

Among NSC’s creditors are Landbank of the Philippines, Philippine National Bank, Credit Agricole Indosuez, China Banking Corp., Rizal Commercial Banking Corp., Metropolitan Bank and Trust Company, Equitable PCI Bank, Export and Industry Bank, Wise Capital Investment and Trust Company Inc., Bank of Commerce, United Overseas Bank, Allied Banking Corp., and the Bank of the Philippine Islands-Asset Management and Trust Group.