US equity firm Cerberus Management Capital and Agila Naval Inc. assumed the operations of Hanjin Heavy Industries and Construction Philippines’ facility and equipment in Subic Bay Freeport Zone, newly-appointed Subic Bay Metropolitan Authority chairman and administrator Rolen Paulino Sr. said Monday
“This [group] will replace Hanjin. This means there will be more jobs for Subic people,” Paulino said as former SBMA chairman Wilman Eisma turned-over the position to him.
Paulino, a former Olongapo City mayor, became the 8th SBMA chairman and administrator, replacing Eisma who resigned on March 1, 2022.
State-run Government Service and Insurance System earlier posted a bulletin detailing the reinsurance of the industrial all risks insurance of SBMA and the project. Cerberus and Agila Naval were given the go signal to assume the operation of the shipyard on Feb. 25, 2022.
Parts of the shipyard that are covered by the reinsurance include semi-fixed equipment like overhead cranes, pumping equipment, water and sewage treatment and others. Other operation equipment, cutting machines and vehicles are included in the coverage.
As a locator in Subic, Cerberus will be leasing the shipyard facility to occupiers/tenants, including the Philippine Navy which will occupy the Northern Yard.
The Philippine Navy will start ramping up operations in the northern section of the yard that will include billeting, office work, light warehousing and docking and general ship operations.
Australian shipyard operator Austal, one of the shipbuilders previously interested in Hanjin Subic, is no longer a tenant/occupant, the GSIS post said.
The shipyard is at a production standstill, with only light warehousing, site security, clean-up and general maintenance listed as daily activities within the facility.
Hanjin declared bankruptcy in 2019, after creditors shunned its plea for loan restructuring. Hanjin defaulted on $1.3 billion worth of loans which became known as the biggest corporate loan default in the Philippines.
The Korean firm had $412 million obligation to at least five local banks and about $900 million to supply creditors in South Korea.
Total investments of the company in Subic reached $2.6 billion. The shipyard employed about 30,000 workers at the peak of its operations.
Hanjin, which focused on building high-value vessels, was established in 2006 as a subsidiary of Hanjin Heavy Industries & Construction Co. Ltd., a multinational company that provides shipbuilding, construction and plant services in South Korea and internationally.
