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2 big US funds keen on rescuing Hanjin Heavy

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By Bernie Cahiles-Magkilat

Two very big American funds are keen on rescuing the bankrupt Hanjin Heavy Industries and Construction Philippines (HHIC-Phil), a subsidiary of the Korean shipbuilder, a top official said.

Overview of the shipbuilder Hanjin Heavy Industries and Construction-Philippines (HHIC-Phil) shipyard in Subic Freeport. (MB file photo)

Overview of the shipbuilder Hanjin Heavy Industries and Construction-Philippines (HHIC-Phil) shipyard in Subic Freeport. (MB file photo)

Court-appointed Hanjin receiver Atty. Rosario Bernaldo said two US are interested in the beleaguered shipbuilder but cannot divulge these interested parties yet as discussions are still confidential.

Bernaldo, however, said that one group is a very big American fund that is tying up with a shipbuilding company. It has no definite partner yet. This fund, she said, has been in discussion with the RCBC Group being the biggest creditor of Hanjin with $140 million exposure out of the $412 million total loans the company got from five Philippine banks.

Land Bank of the Philippines has about $80 million exposure in Hanjin, while Metropolitan Bank and Trust Co. and BDO Unibank has $72 million and $60 million, respectively. Bank of the Philippine Islands has $52 million exposure. Hanjin defaulted on its obligations early January this year.

The other American group is also trying to put up a consortium with a Singaporean and an Italian shipbuilder, Bernaldo said.

As overseer of HHCI-Phil, Bernaldo said that a joint venture with the local shipbuilder and the new investor is most probable to get the South Korean shipbuilder get back to operation.

“I want the workers to have employment again,” she said.

But, she also said that even an outright buyout, Hanjin can still work as a subcontractor.

Aside from the two US groups, Dutch shipbuilder Damen Shipyard Group has also conducted technical inspection of the Hanjin shipyard in Subic Freeport as well as held discussion with the Department of Trade and Industry and Board of Investments signaling more concrete action for its interest in the country’s largest shipbuilding facility.

Trade and Industry Secretary Ramon M. Lopez has met with visiting company Chairman Kommer Damen last March 4, to present the Hanjin facility in Subic and other investment options in the country.

Lopez, who is also chairman of BOI, the country’s premier investment promotion agency, took the opportunity to meet with Damen during his visit to the country following the shipbuilder’s interest to possibly partner with the Philippine Navy to build and supply naval defense vessels using the Hanjin facility
The BOI said that Hanjin has invested some $2.3 billion in the Subic economic zone since it set up the shipyard in 2006. The shipyard had built 123 vessels by 2018, including oil tankers and merchant ships, making the Philippines one of the top shipbuilding nations in the world.

But slower demand and delays in payments from buyers squeezed HHIC-Phil’s cash flow.

At one point, the shipyard was home to more than 32,000 Filipino workers gainfully employed and is being recognized as a world-class shipyard with competitive edge. Now, there are only 300 workers left to finish construction of remaining vessels.

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