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Business

Foreign groups eye $100-M investment in Steelcorp

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Certain investors from the United States, Europe and Asia are eyeing equities in Steel Corp. of the Philippines (Steelcorp) due to its "strong market leadership and profit potentials."

Discussions have reportedly started for the infusion of $100-million fresh capital for Steelcorp from the prospective foreign investors.

The forthcoming financial package will enable Steelcorp, a leader in the local iron and steel industry, to sustain its aggressive marketing offensive and boost its production to meet increasing demands for its products.

Sixty percent of the package will be used as permanent working capital, with the remaining 40 percent earmarked for equity infusion to retire dollar-denominated long-term loans.

"The potential investors are very much long-term growth oriented, and recognize that there are still investment opportunities in the Philippines worth looking into," a Steelcorp official said.

Steelcorp, producer of Galvalume which dominates the local G.I. industry, is generally considered an attractive investment opportunity "due to its long-term growth prospects arising from its market leadership."

The company enjoys various competitive edge that include world-class manufacturing facilities, premium quality products, extensive distribution network and the capability to produce its own raw materials.

In addition, Steelcorp enjoys special incentives apart from tax relief and protection schemes provided by Republic Act 7103, also known as the Iron and Steel Industry Act.

Steelcorp stockholders indefinitely shelved its planned initial public offering previously scheduled in 1997 and 2000 in Singapore due to unfavorable developments in the capital markets. In this connection, the equity investment plan has now switched to a private placement for financial and strategic investors which is being arranged by Investment and Capital Corp. of the Philippines. ICCP has successfully raised capital funds for several Philippine companies in the last few years despite the 1997 Asian crisis.

They described as "very encouraging" the immediate responses so far received from prospective investors. Although initial delays were encountered due to the political events in the Philippines during the recent past months, ICCP is hopeful that this deal can be closed as soon as possible.

"This also augurs well for the entire industry sector, provided the country can sustain its return to political normalcy under the Arroyo administration," they said, adding that the positive impacts of such investor confidence may be felt before the year ends.

They cited a report by the National Economic Planing Secretary Dante Canlas who said that while investments were significantly lacking in the first quarter, investor confidence is expected to grow in the aftermath of the just-concluded national and local elections.

Canlas based its optimism on figures by the Board of Investment and the Philippine Economic Zone Authority which showed an upsurge in planned foreign investments despite the prevailing political and economic uncertainties in the country.

By and large, these investors remained bullish about the Philippine economy, the source said.

vuukle comment

BOARD OF INVESTMENT AND THE PHILIPPINE ECONOMIC ZONE AUTHORITY

CANLAS

EUROPE AND ASIA

INVESTMENT AND CAPITAL CORP

IRON AND STEEL INDUSTRY ACT

NATIONAL ECONOMIC PLANING SECRETARY DANTE CANLAS

REPUBLIC ACT

STEEL CORP

STEELCORP

UNITED STATES

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