3 foreign groups express interest in Hanjin takeover

MANILA, Philippines — Three foreign groups are planning to submit business proposals for the possible takeover of the shipyard facility of financially troubled Hanjin Heavy Industries and Construction Philippines (HHIC-Phil Inc.) in Subic, according to the Board of Investments.

Ceferino Rodolfo, BOI managing head and Department of Trade and Industry undersecretary, told reporters that Dutch shipbuilding firm Damen Shipyard Group, French firm Naval Group, and an American firm have promised to come up with studies and business proposals for Hanjin’s facility in Subic.

“They have to give this to the banks because they have control over the assets,” he said.

To takeover the shipyard facility in Subic, Rodolfo said the interested firm would have to pay Hanjin’s $412 million debt to banks and need a working capital of $10 million per month.

According to Rodolfo, to operate the facility in the same way as Hanjin for building large vessels may be difficult due to the slowdown in global demand, payment terms being heavy on the tailend of the production of the order, and competition from Chinese firms. 

According to Rodolfo, interested firms are also looking at whether the facility could be retrofitted for other purposes including building vessels for commercial, as well as military use.

Other foreign firms have earlier expressed interest in Hanjin’s Subic facility with two from China, two from the US, and two from Japan.

Locally, International Container Terminal Services Inc. chairman Enrique Razon said earlier, he is in talks with the creditor banks of Hanjin for the possible takeover of the shipyard facility in Subic.

He said the facility would not be used for shipbuilding, but could be developed into ports.

The government is helping find a white knight for Hanjin, the biggest investor in the Subic Bay Freeport Zone, given the impact of its closure on employment.

The company halted operations after declaring bankruptcy, with $400 million worth of outstanding loans from Philippine banks, as well as $900 million debts with South Korean lenders.

Established in 2006 as a subsidiary of South Korean firm Hanjin Heavy Industries & Construction Co. Ltd., HHIC-Phil focused on building high-value vessels.

At its peak, the company had employed 30,000 workers.