Port operator International Container Terminal Services Inc. is in talks with creditor banks of Hanjin Heavy Industries and Construction Philippines on the planned acquisition of the Korean shipbuilder’s facilities in Subic, Zambales.
ICTSI president Enrique Razon Jr. said in an interview at the sidelines of the annual stockholders’ meeting that the company started making presentations to the banks on the planned acquisition.
“We are still making presentations to the banks. The banks own it now. We are developing a master plan for Hanjin but we don’t want to talk about it too much,” Razon said.
Razon said a part of the discussion with the banks is whether ICTSI should have joint venture partners to buy Hanjin’s facilities.
Razon said ICTSI would not venture into shipbuilding and planned to develop the property into “several things.”
“We don’t want anything to do with shipbuilding. It is a large facility so it will be several things,” Razon said.
“The Philippines is not really competitive in this area. Nothing that the shipyard uses is made in the Philippines, unlike Japan, China and Korea [where] they make the steel, the machinery, all of that,” he said.
Creditor banks of Hanjin, including local lenders Rizal Commercial Banking Corp., state-owned Land Bank of the Philippines, Metropolitan Bank & Trust Co., Bank of the Philippine Islands and BDO Unibank Inc., earlier agreed to a debt-to-equity swap scheme to save the company.
Razon said the creditor banks of Hanjin would want to sell their stakes in the company.
“The banks will eventually give it to someone. They’re not gonna run it themselves. The banks definitely want to get rid of it. The bank only cares to be paid back,” Razon said.
The financially-troubled South Korean shipbuilder filed for a voluntary rehabilitation in January amid mounting debts to Philippine and Korean lenders.
Meanwhile, Razon said he was cautiously optimistic about the port business for 2019 as global trade was not expected to grow significantly over the next few years.
“So even if global trade doesn’t grow at all, which is more or less my expectation overall, you will have strong growth in places like Africa and other markets but the main trade routes―Pacific, Atlantic―probably won’t grow. But we will get growth from having modern [facilities]. Almost all our facilities are modern,” Razon said.
ICTSI budgeted $380 million for 2019 capital expenditures. This will be used for projects in Manila, Mexico and Iraq.