SteelAsia Manufacturing Corp. proposed an eight-year compensation program to acquire National Steel Corp. and pay P7.4 billion worth of debt incurred by the steel company based in Iligan City.
Industry group Philippine Iron and Steel Institute said these were among the important points included in the proposal submitted by SteelAsia to the Trade Department.
“We’re not asking for any tariff protection. What we want to do is to settle all the pertinent liabilities and create a modern facility that can manufacture medium and large products,” said Pisi president Roberto Cola, who is also the vice president of SteelAsia.
Cola said there would be many parties involved in the planned acquisition including creditors such as local banks, an Indian group that formerly owned the facility, the liquidator and the government which still has a 12-percent stake in National Steel.
Cola said the local government of Iligan City, the site of the complex, was asking for P4 billion in unpaid real estate taxes while bank loans may reach P3 billion. National Steel also has P400 million in unpaid electricity bills.
“The first step is for all parties to agree to allow us to take over. The process is not that simple since there are liabilities that we already agreed to shoulder and the permitting process alone will take us one year,” he said.
Cola said as most National Steel’s equipment had been cannibalized and the plant had been idle for a long time, SteelAsia was planning to build a new plant with new equipment.
SteelAsia initially plans to put a section mill that will easily cost P150 million and a large plate mill or rolled steel mill.
Cola said SteelAsia was most interested in the more than 200-hectare property that included a port with industrial zoning.
He said SteelAsia chairman and chief executive Benjamin Yao already met with Danny Concepcion, the lead liquidator. The company has yet to receive a response from the Trade Department and the liquidator.
SteelAsia has an initial offer to acquire the property for P2,000 per square meter.
SteelAsia has six plans with a combined capacity of 2.3 million metric tons of reinforcing bars annually. It is expanding its rebar capacity to 4 million MT over the next five to seven years.