The Grey Chronicles


The Cents of The Pita . . .

From the time it took over National Steel Corporation, Global Steel Philippines (SPV-AMC), Inc [GSPI] had announced conflicting amount of investments in the former NSC plant. Here are some examples:

“On the first year [2004] of investment to the NSC, GIHL plans to put some $15 million and another $10 million in the second year [2005]. It will also pump in an additional $60 million as working capital. ” (Manila Standard Today, 04 February 2004)

“GIHL will invest $90 million for operating and working capital this year [2004] and an additional $700 million [2005].” (Manila Standard Today, 05 February 2004)

“GIHL, [Pramod] Mittal said, would initially invest $90 million in NSC this year [2004] for operating expenses, working capital, start-up and takeover cost. Next year [2005], Mittal said, GIHL would put in another $100 million.” (The Philippine Star, 05 February 2004)

“LNM’s investment and working capital in NSC for this year [2004] alone would be approximately $70 million as compared to GIHL’s $25 million.” (The Philippine Star, 15 January 2004)

“[Sushant] Das confirmed that the investment needed to rehabilitate and re-operate NSC would be between $80 million to $100 million, "as any serious bidder knows, and similar figures feature in GIHL’s business plan."” (The Philippine Star, 19 January 2004)

“GIHL, [Landbank of the Philippines (LBP) first vice president Cecilia C.] Borromeo said, has so far infused P50 million [$0.9 million] in rehabilitating the steel plant and has already employed about 500 workers.” (The Philippine Star, 19 May 2004)

Annotations: Thus, GSPI planned to invest as much as $100 million for 2004, but only managed to pour about $30 million, a shy away from the original $25 million, which LNM said was too small.

“But records from the Securities and Exchange Commission show that the GSII had only about P11 million initial capitalization for National Steel’s rehabilitation. Some industry leaders maintain that money isn’t enough for any upgrading. [Sushant] Das said in a statement, however, that the GSII has invested around $30 million to rehabilitate the Iligan plant in the past 12 months [2004]. "We plan to invest at least another $25 million," he added. ” (The Manila Times, 01 June 2005)

“GSII claims that it has spent $30 million to rehabilitate the former National Steel Corp. (NSC) plant in Iligan, Davao. However, a former NSC official doubts GSII’s claim, pointing out that if $30 million had indeed been spent on the Iligan facilities, GSII should be producing steel products comparable with the products produced by old steel mills in Indonesia, India and China. ” (The Philippine Star, 06 July 2005)

“Global Steel Philippines (SPV-AMC) Inc., the special purpose vehicle formed by the former National Steel Corp. (NSC), is raising its authorized capital stock to P3 billion [$54 Million] from only P500 million [$9 million].” (The Philippine Star, 25 August 2005)

“Global Steel was considered "technically in default and its remaining loan of P12.5 billion due and demandable" following its attempt last Oct. 15 to issue a P250-million or $4.5-million L/C guarantee for its Oct. 15, 2006 loan payment of P500 million or $9 million.
Global Steel, Castillo explained, tried to negotiate for a prepayment for its Oct. 16, 2006 loan payment without issuing another P250-million or $4.5-million L/C for the balance of its Oct. 15, 2006 loan installment. ” (The Philippine Star, 23 November 2005)

Annotations: Thus, GSPI invested $54 Million in 2005, to raise the capital stock, instead of the $100 million it promised last February 2004. So what happened to the $700 million?


Manila Standard (2004). NSC plant resumes operation Manila: Manila Standard Today 04 February 2004. back to text

Flores, Alena Mae S. (2004). Economic zone status eyed for NSC Manila: Manila Standard Today 05 February 2004. back to text

Go, Marianne V. (2004). NSC plant site may be declared spc’l ecozone. Manila: The Philippine Star 05 February 2004. back to text

Go, Marianne V. (2004). LNM pushes counter-offer for National Steel Manila: The Philippine Star 15 January 2004. back to text

Go, Marianne V. (2004). GIHL scores LNM over Nat’l Steel bidding issue Manila: The Philippine Star 19 January 2004. back to text

Torres, Ted P. (2004). Danaharta can’t oppose NSC sale to Global — creditors Manila: The Philippine Star 19 May 2004. back to text

Estopace, Dennis D. and Niel V. Mugas (2005). Steel firm to settle tax dues Manila: The Manila Times 01 June 2005. back to text

Marianne V. Go (2004). Galvanizers complain about poor quality of steel produced by GSII. Manila: The Philippine Star 06 July 2005. back to text

Dela Peña, Zinnia B. (2004). Global Steel hikes capital to P3B. Manila: The Philippine Star 25 August 2005. back to text

Go, Marianne V. (2005). Global Steel creditors waive default call Manila: The Philippine Star 23 November 2005. back to text


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