Along with 16 other creditors, the PNB was able to formulate a liquidation plan paving the way for a special purpose vehicle (SPAV) "that will operate, lease or dispose of the Iligan plant of the troubled National Steel Corp. (NSC)."
Through a memorandum of agreement (MOA), the creditors and three of the company’s stakeholders led by Hottick Investments Inc. will rehabilitate or dispose of the plant in an integrated manner, and not on a piecemeal basis."
The PNB said that the SPAV would enable creditors to convert part of the loans they hold in NSC into equity. Both the creditors and majority shareholders will own the SPAV under an 80-to 20-percent equity basis.
"The immediate effect of the conversion of the P4.8 billion out of the total P5.6-billion loan into equity for PNB, is the reduction of the bank’s non-performing loan (NPL) ratio by approximately four percent," the bank said in a press statement.
As of end 2001, the bank‚s non-performing assets (NPAs) stood at approximately P90.3-billion of which some P42.2 billion are NPLs, at least P23.5 billion are real and other properties owned or acquired (ROPOA), and P18.8 billion are classified as other assets.
That has resulted in a net loss of P4.13 billion end 2001. The bank expects to start registering a net income in Year Four (2005-2006) based on the rehabilitation program.