Creditors to write off part of NSC debts

Major creditors of the National Steel Corp. (NSC) have agreed to write off a portion of their exposure to the mothballed steel firm, Trade and Industry Secretary Manuel Roxas II disclosed yesterday following a meeting among NSC creditor banks, the National Development Co. (NDC) and Pengurusan Danaharta Nasional Berhad.

"During that meeting, there was a consensus on the parameter that would form a possible solution to NSC," Roxas said.

According to Roxas, the solution will involve the writedown of the Malaysian group’s exposure in NSC and the conversion of a substantial portion of creditor-banks’ remaining exposure in the steel firm into equity.

Even the NDC, Roxas said, agreed to write down its exposure.

"With the writedown, NSC will be relieved of its debt burden, allowing it to operate on a clean book basis,"Roxas said.

There was also agreement that financial obligations to NSC’s employees will also be settled such as their unpaid salaries and pensions. Likewise, financial obligations to NSC suppliers will also be paid as well as unpaid electricity bills to the National Power Corp. (Napocor).

Details of the writedown, however, will still have to be finalized.

It was not clear if the option to lease the NSC plant would still be pursued, especially since the process of seeking proposals had already been started.

Three firms have submitted differing proposals to rehabilitate the debt-saddled steel firm. These were Voest Alpine, Cathay Pacific Steel Corp. and Allengoal Steel and Fabrication. – Marianne Go