NSC seeks new 60-day debt relief

The National Steel Corp. (NSC) is seeking another 60-day extension of its suspension of debt payments to keep its creditors at bay and prevent them from pursuing claims against the company's assets.

The debt-laden NSC said that while the first 60-day debt relief granted to it by the Securities and Exchange Commission (SEC) lapsed last March 18, it needs another 60 days or until May 18 to firm up talks with a potential investor and to come up with a viable rehabilitation plan.

NSC said it is currently firming up negotiations with a European steel firm, Duferco S.A. of Switzerland. The steel company is said to be the largest independent trading firm in the world and also the biggest trader of slabs.

Together with its extensive trading operations, Duferco S.A. is becoming a major producer of steel finished products in the world, currently producing five million metric tons.

NSC said that Duferco S.A. has tied up with Novolipetsk Mettalurgical Kombinat (NLMK), a major slab producer in Russia, with their plan to rehabilitate the Iligan-based steel company.

The NSC said Duferco S.A. already made an ocular inspection of the steel mill and confirmed its interest by offering to bring into the country its worldwide, sophisticated trading operation.

The NSC said that while negotiations have reached its final stage, there are still many details that need to be threshed out between the two parties.

The final shape of the agreement will be the basis for the preparation of the revised or amended rehabilitation plan of NSC.

The NSC also requested the SEC for another 30-day extension or until April 27 to come up with a revised rehabilitation plan.

The interim receivers for NSC led by Monico V. Jacob and Antonio Arizabal said the extension is necessary since the receivers have just assumed their functions and are currently talking with creditor banks on how to rehabilitate the company, the inputs of which will be incorporated in the amended rehabilitation plan.

The receivers said they met with the steering committee of creditor banks last week, including representatives of the Philippine National Bank, Land Bank of the Philippines, Global Bank and Credit Agricole.

NSC's rehabilitation plan hinges largely on being able to find investors willing to pump fresh money into the company to be used immediately to buy raw materials needed to resume steel production.

Aside from Duferco S.A., another group of investors led by Grupo F. Jacinto (GFJ) has also expressed interest in acquiring 51 percent of the company.

NSC, still owned by Hong Kong-based Hottick Investments Ltd., has said it has assets worth around P20 billion.

The steel manufacturer was forced to seek debt relief after suspending operations in November 1999 following a continued decline in sales due to the influx of cheap imported steel from Russia and South Korea.