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Malaysian firm to sell NSC stake
By Gil C. Cabacungan Jr

26/8/2001 5:41 am Sun

[Hmmm... mengapa tidak mahu kes ini dibawa ke mahkamah??? - Editor]

Malaysian firm to sell NSC stake

Posted: 8:30 PM (Manila Time) August 24, 2001

By Gil C. Cabacungan Jr.

Inquirer News Service

MALAYSIA'S debt rehabilitation agency Pengurusan Danaharta Nasional Bhd. has agreed to the joint sale of its 80-percent stake in National Steel Corp. (NSC) with that held by the Philippine government even if it would mean taking a big loss in its investment, a source in government said.

The source said this was a major breakthrough in the ongoing efforts to attract a long-term investor to take over NSC and take charge in reviving the operations of the steel giant. NSC has been mothballed since November 1999 due to its inability to pay 16 billion pesos (about 313 million dollars) in debts.

The source said the agreement by Danaharta was reached during President Gloria Macapagal-Arroyo's state visit to Malaysia early this month.

NSC has remained shuttered for 20 months due to a dispute between Danaharta and the bank creditors of NSC led by the Philippine National Bank over the liquidation of NSC's assets.

Danaharta earlier declared it would agree to sell its stake in NSC only if it could recover all of its investments in the company. The banks found this unacceptable because it was inevitable that all parties would take a hit in the sale of NSC assets. The resulting dispute has since been the subject of a corporate case pending with the Securities and Exchange Commission.

Danaharta became involved in NSC when took over a three-billion-ringgit loan of Malaysian-controlled Hottick Investments Co. from Malayan Banking, RHB Bank, Bank Bumiputra and Commerce Assetholding Bhd.

Hottick, based in Hong Kong but controlled by Malaysia's Renong Bhd, had taken control of NSC when in 1997 it bailed out the Westmont group, the Malaysian investor that had won the Philippine government's auction to privatize NSC.

The Macapagal administration has obtained agreement of NSC's Malaysian investors and local creditor banks to sit down and review proposals for a temporary reopening of NSC's steel factory in Iligan province, in Mindanao, pending the entry of a "white knight" that will undertake the long-term rehabilitation of NSC, the country's biggest steelmaker.

In case the Malaysian government and local creditor banks still fail to reach a common ground on reopening NSC, the Philippine government would step in and make the final decision.

Both the Malaysian government and the group of banks have agreed to abide by whatever the Philippine government will decide, and both have promised not to bring the case to court.