Hanjin creditors close to deal with investor on Subic shipyard

The Subic Bay Metropolitan Authority (SBMA) said creditors are close to a deal for the takeover of Hanjin Heavy Industries and Construction Philippines, Inc., with foreign investors currently in talks with banks on how to proceed with the bankrupt shipbuilder’s facilities and work force.

SBMA Chairman Wilma T. Eisma told reporters Thursday she was informed the creditor banks are “getting very close” to concluding negotiations for the bankrupt shipbuilder.

“As we speak, (the creditors are seeking) exclusive discussions with a particular entity,” she said in a chance interview with reporters in Subic yesterday.

“The hope is that they’ll be able to finish discussions by the end of October, and we’ll be able to announce in December the final path for Hanjin to take.”

She did not identify the entity speaking to the creditors, but added that “interested foreign investors” have agreed to accommodate the 33,000 Hanjin employees that were laid off when the shipbuilder declared bankruptcy earlier this year.

“Right now, the only thing I can tell you is that there is more than one foreign company that’s actually in discussions with the creditor banks. And Filipino companies are also very interested,” she said.

In January, the Philippine unit of the South Korean shipbuilder filed for corporate rehabilitation due to “serious financial trouble,” leaving some $412 million in outstanding loans with Philippine banks and some $900 million with South Korean lenders.

The company still owes $145 million to Rizal Commercial Banking Corp.; $85 million to Land Bank of the Philippines; $70 million to Metropolitan Bank & Trust Co.; $60 million to BDO Unibank, Inc. and $52 million to the Bank of the Philippine Islands.

Since its shutdown, the Board of Investments (BoI) said several foreign investors have expressed interest in taking over the operation, including two unnamed Chinese shipbuilders and Dutch firm Damen Shipyards Group.

International Container Terminal Services, Inc. (ICTSI) likewise expressed interest in acquiring some assets of Hanjin, saying in April that it was talking to banks to develop a “master plan” for the shipyard. Hanjin’s assets are estimated at about $1.6 billion.

Hanjin was one of the biggest shipbuilders in the Philippines before it filed for bankruptcy this year. The Philippine unit of South Korea’s Hanjin Heavy Industries and Construction Co., Ltd. started operating its shipyard at the Subic Bay Freeport Area in 2006.
Source: Business World