This is the second extension since the first 90-day extension lapsed yesterday. The agreement was originally scheduled for signing last April 29.

A banking source said the stalled signing of the final asset purchase agreement was caused by the unclear position of the Local government of Iligan on whether NSC’s debts with the local government of Iligan, which was estimated at over P700 million, will be condoned or not.

Former Iligan Mayor Franklin Quijano was amenable to waive a portion of the debt but since there is now a new Mayor of Iligan, negotiations have been prolonged.

Neither the Indian-owned GIHL nor the creditor banks is willing to pay for the real estate taxes owned by NSC to the local government of Iligan.

Unless, the issue on the tax payments is agreed and the position of the local government becomes is clear it is apparent that there will be no signing of the final purchase agreement.

Under the memorandum of agreement earlier signed between GIHL and the creditor banks, GIHL will pay the Secured Creditors and the Original NSC stockholders P13.25 billion over an eight-year period under a negotiated schedule.

The signing of the final asset purchase agreement will result in the payment by GIHL of P1 billion downpayment while the balance of P12.25 billion will be paid over the next eight years.

It could be recalled that NSC shut down operations in November 1999 amid staggering debt.

Former Trade and Industry Secretary Manuel A. Roxas II was then tasked by President Gloria Arroyo to find a workable solution for the eventual rehabilitation of the country’s only integrated steel mill plant.

Roxas’ was able to prevent the filing of suits and counter of the involved parties and worked out an agreement among creditors and investors.

This led to a debt to equity swap arrangement between NSC bank creditors and the Malaysian owners. (BCM)