US investor takes over debt-laden Philippine shipyard near former US army base
US private equity firm Cerberus Capital Management together with local partner Agila Naval is acquiring an indebted shipyard in the Philippines’ Subic Bay northeast of the capital Manila for $300 million, the Subic Bay Metropolitan Authority said on March 7.
The shipyard was owned by South Korea’s shipbuilding firm Hanjin Heavy Industries and Construction until 2019 when it stopped operations due to a lack of profitability, laying off around 23,000 remaining workers.
Hanjin’s Philippine unit Hanjin Heavy Industries and Construction Philippines subsequently declared bankruptcy after creditors shunned its plea for loan restructuring. Hanjin defaulted on $412 million worth of loans, the biggest corporate loan default in the history of the Philippines by then.
Subic Bay Metropolitan Authority chairman and administrator Rolen Paulino Sr. said he expects that Cerberus would resume operations at the facility and “bring back jobs for Subic people.”
Plans are that Cerberus will be leasing the shipyard facility to occupiers and tenants and resume shipbuilding. The shipyard is currently at a production standstill, with only light warehousing, site security, clean-up and general maintenance named as daily activities.
Philippine Navy to lease 300 hectares
The northern yard of the shipyard, about a third of the 300-hectares facility, will be leased by the Philippine Navy from Cerberus, reports said. This has mainly to do with the shipyard’s strategic location which provides shelter, depth and access to the South China Sea. The adjacent site of the bay was home to a US navy base until 1992.
The navy will use the location mainly for billeting, office work, light warehousing, docking and general ship operations, according to the reports.
The parties are aiming to close the deal on April 15, a source said.
For Hanjin, the sale of the shipyard is no glorious chapter in its history. Total investments of the company in Subic reached $2.6 billion. The shipyard employed about 30,000 workers at the peak of its operations when it built container ships, bulk carriers and oil tankers, among them the first Philippine-built container ship M/V Argolikos and the country’s largest oil tanker, M/T Leyla K, as well as the CMA CGM Antoine de Saint Exupery, a container ship operated by French shipping company CMA CGM as the company’s largest.
US private equity firm Cerberus Capital Management together with local partner Agila Naval is acquiring an indebted shipyard in the Philippines’ Subic Bay northeast of the capital Manila for $300 million, the Subic Bay Metropolitan Authority said on March 7. The shipyard was owned by South Korea’s shipbuilding firm Hanjin Heavy Industries and Construction until 2019 when it stopped operations due to a lack of profitability, laying off around 23,000 remaining workers. Hanjin's Philippine unit Hanjin Heavy Industries and Construction Philippines subsequently declared bankruptcy after creditors shunned its plea for loan restructuring. Hanjin defaulted on $412 million worth of loans,...
US private equity firm Cerberus Capital Management together with local partner Agila Naval is acquiring an indebted shipyard in the Philippines’ Subic Bay northeast of the capital Manila for $300 million, the Subic Bay Metropolitan Authority said on March 7.
The shipyard was owned by South Korea’s shipbuilding firm Hanjin Heavy Industries and Construction until 2019 when it stopped operations due to a lack of profitability, laying off around 23,000 remaining workers.
Hanjin’s Philippine unit Hanjin Heavy Industries and Construction Philippines subsequently declared bankruptcy after creditors shunned its plea for loan restructuring. Hanjin defaulted on $412 million worth of loans, the biggest corporate loan default in the history of the Philippines by then.
Subic Bay Metropolitan Authority chairman and administrator Rolen Paulino Sr. said he expects that Cerberus would resume operations at the facility and “bring back jobs for Subic people.”
Plans are that Cerberus will be leasing the shipyard facility to occupiers and tenants and resume shipbuilding. The shipyard is currently at a production standstill, with only light warehousing, site security, clean-up and general maintenance named as daily activities.
Philippine Navy to lease 300 hectares
The northern yard of the shipyard, about a third of the 300-hectares facility, will be leased by the Philippine Navy from Cerberus, reports said. This has mainly to do with the shipyard’s strategic location which provides shelter, depth and access to the South China Sea. The adjacent site of the bay was home to a US navy base until 1992.
The navy will use the location mainly for billeting, office work, light warehousing, docking and general ship operations, according to the reports.
The parties are aiming to close the deal on April 15, a source said.
For Hanjin, the sale of the shipyard is no glorious chapter in its history. Total investments of the company in Subic reached $2.6 billion. The shipyard employed about 30,000 workers at the peak of its operations when it built container ships, bulk carriers and oil tankers, among them the first Philippine-built container ship M/V Argolikos and the country’s largest oil tanker, M/T Leyla K, as well as the CMA CGM Antoine de Saint Exupery, a container ship operated by French shipping company CMA CGM as the company’s largest.
