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LETTER OF INSTRUCTIONS
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LETTER OF INSTRUCTIONS NO.
1155 - DIRECTING A REHABILITATION PLAN FOR GALLEON SHIPPING
CORPORATION |
National Development Company
Maritime Industry Authority
WHEREAS, Galleon Shipping Corporation is presently in a distressed state in view of the unfavorable development in the liner shipping business;
WHEREAS, the exposure of the Philippine government financial institution is substantial;
WHEREAS, it is a policy of government to provide a reliable liner service between the Philippines and its major trading partners;
WHEREAS, it is a policy to have a Philippine national flag liner service to compete with other heavily subsidized national shipping companies of other countries;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, do hereby direct the following:
1.
NDC shall acquire 100% of the shareholdings of Galleon Shipping
Corporation from its present owners for the amount of P46.7 million
which is the amount originally contributed by the present shareholders,
payable after five years with no interest cost.
2. NDC to immediately infuse P30 million into Galleon
Shipping Corporation in lieu of is previously approved subscription to
Philippine National Lines. In addition, NDC is to provide additional
equity to Galleon as may be required.
3. DBP to
advance for a period of three years from date hereof both the principal
and the interest on Galleon's obligations falling due and to convert
such advances into 12% preferred shares in Galleon Shipping Corporation.
4. DBP and NDC
to negotiate a restructuring of loans extended by foreign creditors of
Galleon.
5. MARINA to
provide assistance to Galleon by mandating a rational liner shipping
schedule considering existing freight volumes and to immediately
negotiate a bilateral agreement with the United States in accordance
with UNCTAD resolutions.
These instructions are to take effect immediately.
Done in the City of Manila, this 21st day of July, in the year of Our Lord, Nineteen Hundred and Eighty-One.
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