The Grey Chronicles


Later: NSC on Liquidation, 2000-2004

The Liquidator’s phase in NSC history officially began in 07 May 2000, when all employees of NSC were retrenched, thus there was no management and the NSC Board of Directors ceased to function. Between November 1999 and April 2000, many employees—managerial staff and most employees with 15 years or more tenure—opted for early retirement.

Meanwhile, the Interim Receivership Committee (IRC), appointed by SEC on 21 December 1999, was commissioned to preserve the existing assets then and if the feasibility of continuing the basic business NSC is determined, to instigate a rehabilitation plan. SEC Chairman Lilia Bautista, a former undersecretary of Department of Trade and Industry thus Corporate Secretary of NSC in 1980s, ordered the liquidation of the steel firm in 03 October 2000. The SEC-appointed interim receivership committee (IRC) headed by Monico Jacob has been ordered to submit a liquidation plan in 60 days. (The Philippine Star, 10 November 2000).

Rommel Ynion wrote in a national newspaper (The Philippine Star, 17 October 2000) that Hottick Investment Ltd threatened to drive overseas Filipino workers (OFWs) out of Malaysia in a bid to stop the liquidation of the firm. Furthermore, lawyer Arturo de Castro, NSC counsel, added, “Under the Corporation Code, the jurisdiction of the Securities and Exchange Commission to order involuntary dissolution is limited only to the grounds provided by existing laws, rules, and regulations.” De Castro claimed that SEC could only order the liquidation of any corporation if it has been proven, among other things, to be: inactive for at least five years, guilty of committing illegal acts or illegally organized (The Philippine Star, 10 November 2000).

Undaunted by the steel firm’s liabilities estimated at around P16 billion in 2000, SEC claimed that six Arab-Chinese investors have expressed interest in buying NSC. The National Steel Labor-FFW led by its president Simplicio H. Villarta Jr., moreover were concerned: “if NSC would be sold at a price less than its outstanding debts the workers claim will be truly jeopardized” (The Philippine Star, 17 October 2000).

Between 2000 and 2004, a succession of offer-proposals were brought forth to resolve the NSC issue.

As early as January 2000, Russia’s Novolipetsk Iron and Steel Corp. (NISC) teamed up with local downstream producers of steel products and began conducting a due diligence review of NSC to determine its actual prospects and rehabilitation requirements (The Philippine Star, 21 January 2000).

There have been unconfirmed reports in 2000 that Lucio Tan, who owned 35% of PNB, was eyeing the purchase of NSC through a local steel firm. At the end of 1999, NSC owed PNB about 5.64-billion peso (US$139.7 million at P40.376:US$1). PNB, moreover, denied reports that it was amenable to the condonation of NSC’s debt (Business World, 07 January 2000).

Even the Philippine government supported the Swiss-company Duferco, Inc., represented by Credit Agricole, to acquire controlling interest in NSC (The Philippine Star, 17 February 2000).

Swiss’ Glencore presented a $150 proposal for NSC in October 2000; Allengoal offered to lease-operate NSC in April 2000 then again in January 2001 and signed lease agreement with NSC on 14 September that year for a fixed monthly rental plus a share of net profits (The Philippine Star, 18 September 2001).

The Allengoal plan—a team-up of Alexander Delmo and Simplicio L. Villarta, Jr—was quite impressive. It entailed the whole enchilada: operate the plant within 45 days saving P12 million a month in maintenance costs; a P20.5 million monthly lease for two years until NSC finds a new buyer; share 40% of the net income; and a P100-million cash-and-performance bond deposited to ensure safety and facilities preservation. In addition, it had a technical tie-up with Hatch Associates, NSC’s consultant since its inception, and an initial P400-million credit line from International Exchange Bank. When it was presented to Hottick, the latter readily accepted. Hottick and the creditors endorsed the original April 2000 Allengoal proposal to Malacañang, where an impeachment in November 2000 overtook it (Bondoc, 2001).

Furthermore, DTI received three lease proposals from Allengoal, Capasco, and Austria’s Voest Alpine on 26 October 2001, and then the NSC Evaluation Committee studied in November that year. The committee was created by the Philippine government to receive, evaluate and select proposals for the interim lease of the NSC’s Iligan plant, after the company was taken over by Pengurusan Danaharta Nasional Bhd., Malaysia’s equivalent of the Philippine Assets and Privatization Trust. (The Philippine Star, 17 September 2001). Refer to Appendix E: Transactions for NSC’s Stake (1995-1998).


Ynion, Rommel (2000n), SEC can’t order NSC liquidation — Hottick Manila: The Philippine Star, November 10, 2000. back to text 1 | 2

Ynion, Rommel (2000), “Hottick threatens to drive OFWs out of Malaysia.” Manila: The Phiippine Star. 17 October 2000. back to text 1 | 2

Ferriols, Des (2000), “Russian steel giant eyes National Steel”. Manila: The Philippine Star, 21 January 2000. back to text

Calica, Dymphna R. (2000) “Finance dep’t thumbs down PNB write off of National Steel’s debt.” Business World. Manila: Businessworld Publishing, 07 January 2000. back to text

The Philippine Star (2000), “Gov’t favors Swiss firm to take over Nat’l Steel.” Manila: The Philippine Star, 17 February 2000. back to text

The Philippine Star. (2001) “National Steel employees back Allengoal proposal” Manila: The Philippine Star, 18, September 2001. back to text

Bondoc, Jarius (2001) “GOTCHA: Restart National Steel, restart north Mindanao.” Manila: The Philippine Star, 17 November 2001. back to text

The Philippine Star (2001). “Lease of NSC facilities to proceed despite Hottick.” Manila: The Philippine Star, 17 September 2001. back to text


Leave a Comment »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

Create a free website or blog at

%d bloggers like this: