ILIGAN CITY, Philippines (6 Oct 2014) - The Singaporean High Court has ruled in favor of the creditors of the National Steel Corp. (NSC) reversing an earlier decision by an arbitration court that favorably granted the petition of the Indian owners of the old and idle steel mills in Iligan City.
The high court rendered its decision last July 31, 2014 to an appeal by the NSC creditors against NSC owners -- Indian-controlled Global Steel Philippines (SPV-AMC), Inc. and Global Ispat Holdings (SPV-AMC).
|Supreme Court of Singapore|
Global Steel and Global Ispat had already appealed the high court's decision.
It could be recalled that NSC creditors led by the Philippine National Bank lost to a case filed by the Indian firms before the Singapore International Arbitration Center in 2013.
The case stemmed from an effort by Global Steel to prevent getting declared in default on payments after getting control of the Philippine steel mill in 2004.
Global Steel had brought NSC creditors and liquidator to a Singaporean arbitration after the latter allegedly failed to deliver clean titles of the Iligan City facilities due to unpaid real estate taxes owed by the NSC.
Under the Philippine government's privatization policy, the NSC facilities were turned over to Malaysian investors in 1995. Indian investors, Global Ispat, subsequently took over in 2004 for a total price of P13.25 billion including an upfront cash of P1-billion while the remainder was to be paid over an 8-year period. That privatization was overseen by then DTI Secretary Mar Roxas.
At that time of privatization, NSC's debts were placed at P16.18 billion, but its assets had been assessed at P29.27 billion. The Philippine National Bank (PNB) has the largest exposure to the company of P5.64 billion.
Government-owned Land Bank of the Philippines followed with P1.2 billion.
The Indian owners failed to sustain the Iligan steel mill operations and eventually went on total shutdown in 2009.
NSC had been abandoned, looted and is now rotting in its 145-hectare industrial complex in Iligan City.