Trade and Industry Secretary Manuel Roxas II said yesterday that the debt restructuring agreement will cover the reduction of the debt burden of NSC from P18 billion to just P2 billion and the conversion of NSC’s debt into equity resulting in the creditor banks gaining an 80 percent control of NSC while the Malaysian shareholding will drop to 20 percent.
He also said both parties have agreed that there must be a unanimous vote on any decision to sell primary assets of NSC at a value not less than 80 percent of the appraised value.
"The remaining primary asset of NSC is the mill since NSC no longer has any real estate assets," Roxas said.
Roxas, who facilitated the compromise agreement between the Malaysian owners and the creditor banks, said that the debt restructuring agreement will be signed in Malaysia by repre-sentatives of Malaysians.
Pengurusan Danaharta Nasional Berhad and the local creditor banks.
The Department of Trade and Industry (DTI) has been working with Danaharta and creditor banks for more than two years now to reach an agreement on the debt restructuring.
Danaharta, which currently holds 82.5 percent of NSC, was initially reluctant to the dilution of its shareholdings in NSC without even securing the right to veto any corporate life-changing decision in the steel firm.
Danaharta had acquired majority control of NSC following a takeover of several Malaysian banks which had loan exposures to Hottick Investments Ltd.
Hottick Investments bought the original shareholdings of another investor, Wing Tiek in NSC.
Hottick used the NSC shares as collateral for the loans from the Malaysian banks.
When the Malaysian government undertook a rehabilitation of the Malaysian banking system, the government-owned holding firm, Danaharta became the repository of the NSC shares.