Court orders liquidation of Steel Corp

MANILA, Philippines - Local banks with exposure to the beleaguered Steel Corporation of the Philippines (SCP) may finally get their loan payments as the Batangas City Regional Trial Court has ordered the company to undergo liquidation proceedings. 

SCP has outstanding financial obligations with a consortium of creditor-banks which include Planters Bank, Chinabank, Land Bank of the Philippines, BDO and DEG.

The order, issued on Sept. 19, cited the following points: rehabilitation is no longer a feasible option for SCP since it appears that it is now insolvent; the continued operations of SCP is threatened by non-payment of its customs duties and other taxes; and the actual result of business operations and financial condition of SCP cannot support the amortization schedule of the restructured debts in the approved rehab plan.

In addition, SCP has not complied with the provisions of the approved rehab plan and with the orders of the rehabilitation court, and has failed to achieve the desired targets and goals set forth in the approved rehab plan, the court noted.

A liquidation order was issued declaring SCP as insolvent and dissolved; ordering the sheriff of the Batangas City RTC to take possession and control of all the properties of the company, except those that may be exempt from execution; directing payments of any claims and conveyance of any property due SCP to the liquidator; prohibiting payments and transfer of any property by SCP; directing all creditors to file their claims with the liquidator within the period set by the rules of procedure; and, authorizing the payment of administrative expenses as they become due.

Accordingly, the sheriffs have implemented the court order and taken possession of the company’s assets.

SCP started having financial difficulties and failed to meet its financial obligations in 2000.