The debt restructuring of NSC is dependent on all of the creditor banks, as well as the Malaysian owners, to agree to a debt haircut and debt-to-equity conversion.
However, the Malaysian owners, who currently control about 82 percent of NSC, would see a dilution of their shareholding in NSC to about 20 percent following the debt restructuring.
The creditor banks, on the other hand, would gain majority control of NSC.
The Malaysian owners are, thus, asking for equal voting rights on any corporate life-changing decision which would affect the value of the Malaysian’s remaining stake in NSC.
The Malaysian owners’ stake in NSC is currently controlled by the Malaysian state holding firm, Pengurusan Danaharta Nasional Berhad.
The original shareholder in NSC was the Hottick Group, which in turn had secured loans from several Malaysian banks.
Following a restructuring of the Malaysian banking system, the Danaharta gained control of the NSC shares.
NSC is saddled with about P16 billion in debt.
The Malaysian are no longer willing to infuse additional funds in NSC and have been opposed to any outright sale of NSC.
The banks, on the other hand, have wanted to foreclose on NSC, but government is trying to keep the steel firm viable by convincing the banks to restructure its debt, reopen the currently mothballed firm or at least agree to allow another firm to operate its facilities.