Banks OK Steelcorp rehab plan

Major local banks and multilateral agencies reaffirmed their trust and confidence in the viability of market leader Steel Corp. of the Philippines (SCP) as an 11-member syndicate of local and foreign creditors approved the company’s financial rehabilitation and debts rescheduling program.

Officials of SCP and representatives of the creditors’ syndicate led by Equitable PCI Bank, successfully concluded on Aug. 28, SCP’s 12-year restructuring program, ending two years of intense negotiations.

The approved rehabilitation plan was based on results of an in-depth due diligence validated by PricewaterhouseCoopers, an international consultancy firm, on SCP’s business plan and financial projections.

SCP is the country’s premier manufacturer and distributor of flat coated steel products, notably its flagship brands Galvalume 55 and Galvabond.

Aristotle Villaraza, senior vice president and head of Equitable PCI Bank’s special projects, asset management and legal group, said that "the financial rehabilitation and debt restructuring plan drawn up for SCP will provide the company with the necessary impetus to broaden its market reach domestically and overseas."

For his part, SCP executive vice-president and group chief finance officer Meldin Al Roy said "this early, we are already looking for ways to further increase our production capacities as we are poised to launch an aggressive marketing campaign to strengthen our dominance in the local flat steel industry and enhance business viability."

"The company will also pursue a more vigorous export marketing thrust particularly in the neighboring ASEAN countries, in a two-pronged strategy meant to bring in much needed dollars and cushion the impact of the high cost imported raw materials arising from the volatility of the Philippine peso against stronger currencies," Roy added.

The successful closing of SCP’s negotiations with its creditors affirmed its viability amid harsh business conditions and should provide opportunities for the company to acquire new capital from foreign strategic investors.

The local creditors which supported SCP in its resolve to maintain market leadership in the industry are Equitable PCI Bank, Chinatrust Bank, China Banking Corp., Planters Development Bank, Philippine Bank of Communications, Asiatrust Bank, Allied Banking Corp., Rizal Commercial Banking Corp. and Keppel Bank.

Their foreign counterparts are Deutsche Investitions-und Entwicklungsgesellschaft mbH (DEG) of Germany and the Asian Finance and Investment Corp. Ltd. (AFTC), a subsidiary of Asian Development Bank.