Manila Bulletin reported that Uttam Galva Metallics Ltd has started conducting due diligence on Global Steel Philippines Inc for a planned acquisition of the steel complex in Northern Mindanao.
As per report, Mr CSS Rao director international projects of Uttam Galva Metallics Ltd has already met with Trade and Industry undersecretary Mr Cristino L Panlilio last month to start inquiring about GSPI.
The report added that no meeting was set for the Indian firm's official and President Aquino because most of the would be buyer's concerns are local issues with the local government unit in Iligan and the company creditors.
A source said that Uttam is also set to meet with the bank creditors led by the Philippine National Bank of the former National Steel Corp
GSPI steel plant in Iligan City used to be Asia's first and biggest. It has been out of operation for almost two years already after its workers staged a strike on alleged non payment of salaries and benefits. GSPI imports steel slabs and converts them into hot rolled and cold rolled flat steel. The formerly National Steel Corp has an installed capacity of 1.5 million tons annually.
It was acquired by Global Steel Holdings Ltd from creditor banks in 2004 for a total price of P 13.25 including an upfront cash of P1 billion and the remainder to be paid over an 8-year period. The company, however, was hounded by economic problems and was not operating at full capacity. It finally halted its operations for more than two years already after it was hit by a labor strike. In May this year, a Singapore arbitration court partially awarded the Iligan steel facilities in favor of GSPI over its previous owners a group of creditor banks led by the Philippine National Bank with 41 percent stake. The Philippine government through the National Development Co has a minority 4 percent stake.