NSC creditors eye Glencore to save firm

The National Steel Corp., smarting from further losses incurred by the maintenance of its rusting mills, may soon start humming with business activity again as its creditors have endorsed an investor perceived to be capable of infusing fresh capital into the beleaguered steel firm.

The steel firm’s creditors – Philippine National Bank (PNB), Credit Agricole Indosuez, and Land Bank of the Philippines (LBP) – appear to have zeroed in on Glencore, among two other prospective investors, as the most logical choice which can put NSC back on track to much-needed recovery.

Glencore, which submitted its investment proposal to NSC’s creditors last Oct. 24, offered to infuse $150 million into the cash-strapped steel firm to jumpstart its comeback in the industry.

With an additional $200 million in fresh working capital, the investor also is eyeing the immediate recovery of the debt-riddled steel firm unencumbered by legal cases usually associated with such a rehabilitation process.

The steel firm’s creditors expressed discomfort with the other two prospective investors – namely, Allengoal and Ispat – due mainly to their perceived inability to salvage NSC from liquidation.

Allengoal, for instance, did not sit well with the creditors since they think that having only an authorized stock of P5 million, it has no financial capacity to carry out its proposal to save the beleaguered steel firm.

The creditors also cited Allengoal’s unsettled obligation to NSC amounting to P23 million as ground for disqualification, coupled with the fact that Ben Tiu of iBank has withdrawn its support from it.

The entry of Glencore into the picture of NSC struggling to avoid being liquidated has fueled speculations that the beleaguered steel firm may eventually be on the road to regaining its foothold in the country’s tottering steel industry.

The Securities and Exchange Commission has ordered the liquidation of NSC after almost a year of waiting for the so-called white knight to salvage it from insolvency.

The steel firm’s Malaysian majority-shareholder also opposed the rehabilitation plan mapped-out by an SEC-installed interim receivership committee, partly prompting the agency to issue such an order.