The Subic Bay Metropolitan Authority said Tuesday the negotiations on the lease contract of Hanjin Shipyard with American private equity firm Cerberus Capital Management may be concluded soon.
SBMA administrator and chief executive Wilma Eisma said shipbuilder Hanjin Heavy Industries and Construction Philippines reserved the right to negotiate anything about the lease contracts to parties that could help it recover from its financial problems.
“Hanjin will assign the contract to whoever is their white knight [to] renegotiate, then [get] approval of the rehabilitation court. It all depends on Hanjin,” Eisma said Tuesday.
SBMA business and investment manager Karen Magno said during a business and investment webinar organized by the Semiconductor and Electronics Industry of the Philippines Inc. the agency was in talks with Cerberus Capital, and not Australian shipbuilder Austal, which also expressed interest in the shipyard.
“I can only share some few information about the Hanjin deal, but not necessarily the details. I can only share the government, as we’re talking to them, and we are nearing completion on the renegotiation for their contract with SBMA,” she said.
She said the SBMA was only active on the discussions for contract renewal, but could not comment on Hanjin’s financial restructuring as “this is a court matter, and we’re out of that.”
Magno said they continued to report to the national government on developments about the Hanjin deal. She confirmed that the Philippine Navy would also occupy a portion of the Hanjin site under the deal with Cerberus.
“We already know they are going to be a tenant of this American company,” she said.
Hanjin declared bankruptcy in 2019, after the banks shunned its plea for loan restructuring. Hanjin defaulted on $1.3 billion loans which became known 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.