U.S. private equity firm Cerberus Capital Management and local partner Agila Naval are buying a heavily indebted shipyard in Subic Bay, northeast of the Philippine capital Manila, for $300 million, the Subic Bay Metropolitan Authority said on March 7. .
Owned by South Korean shipbuilder Hanjin Heavy Industries, the shipyard ceased operations in 2019 due to a lack of profitability, laying off about 23,000 remaining workers.
Hanjin’s Philippine subsidiaries, Hanjin Heavy Industries and Philippine Construction, subsequently declared bankruptcy after creditors shunned their loan restructuring requests. Hanjin defaulted on loans worth $412 million, the largest corporate loan default in Philippine history at the time.
Subic Bay Metropolitan Authority chairman and chief executive Lauren Paulino Sr. said he expects Cerberus to resume operations at the facility and “bring jobs back to Subic.”
The plan is that Cerberus will lease the shipyard facilities to occupiers and tenants and resume shipbuilding. The shipyard is currently out of production, with only light warehousing, site safety, cleanup and general maintenance as day-to-day activities.
Philippine Navy to lease 300 hectares
The 300-hectare northern yard, or about a third of the shipyard, will be leased from Cerberus by the Philippine Navy, the report said. This is mainly related to the strategic location of the shipyard, which provides refuge, depth and access to the South China Sea. Until 1992, the adjacent site in the bay was home to a US naval base.
The Navy will reportedly use the location primarily for accommodation, office work, light storage, docking and general ship operations.
The two sides aim to close the deal by April 15, the sources said.
For Hanjin, the sale of the shipyard was not a glorious chapter in its history. The company’s total investment in Subic reached $2.6 billion. The shipyard employed around 30,000 workers at the peak of its operations, when it built container ships, bulk carriers and tankers, including M/V Argolikos, the first containership built in the Philippines, and M/T Leyla, the country’s largest tanker. K, and CMA CGM Antoine de Saint Exupery, the company’s largest container ship operated by French shipping company CMA CGM.
U.S. private equity firm Cerberus Capital Management and local partner Agila Naval are buying a heavily indebted shipyard in Subic Bay, northeast of the Philippine capital Manila, for $300 million, the Subic Bay Metropolitan Authority said on March 7. . Shipbuilding company Hanjin Heavy Industries suspended operations until 2019 due to a lack of profitability, laying off about 23,000 remaining workers. Hanjin’s Philippine subsidiaries, Hanjin Heavy Industries and Philippine Construction, subsequently declared bankruptcy after creditors shunned their loan restructuring requests. Hanjin defaults on loans worth $412 million,…
U.S. private equity firm Cerberus Capital Management and local partner Agila Naval are buying a heavily indebted shipyard in Subic Bay, northeast of the Philippine capital Manila, for $300 million, the Subic Bay Metropolitan Authority said on March 7. .
Owned by South Korean shipbuilder Hanjin Heavy Industries, the shipyard ceased operations in 2019 due to a lack of profitability, laying off about 23,000 remaining workers.
Hanjin’s Philippine subsidiaries, Hanjin Heavy Industries and Philippine Construction, subsequently declared bankruptcy after creditors shunned their loan restructuring requests. Hanjin defaulted on loans worth $412 million, the largest corporate loan default in Philippine history at the time.
Subic Bay Metropolitan Authority chairman and chief executive Lauren Paulino Sr. said he expects Cerberus to resume operations at the facility and “bring jobs back to Subic.”
The plan is that Cerberus will lease the shipyard facilities to occupiers and tenants and resume shipbuilding. The shipyard is currently out of production, with only light warehousing, site safety, cleanup and general maintenance as day-to-day activities.
Philippine Navy to lease 300 hectares
The 300-hectare northern yard, or about a third of the shipyard’s area, will be leased from Cerberus by the Philippine Navy, the report said. This is mainly related to the strategic location of the shipyard, which provides refuge, depth and access to the South China Sea. Until 1992, the adjacent site in the bay was home to a US naval base.
The Navy will reportedly use the location primarily for accommodation, office work, light storage, docking and general ship operations.
The two sides aim to close the deal by April 15, the sources said.
For Hanjin, the sale of the shipyard was not a glorious chapter in its history. The company’s total investment in Subic reached $2.6 billion. The shipyard employed around 30,000 workers at the peak of its operations, when it built container ships, bulk carriers and tankers, including M/V Argolikos, the first containership built in the Philippines, and M/T Leyla, the country’s largest tanker. K, and CMA CGM Antoine de Saint Exupery, the company’s largest container ship operated by French shipping company CMA CGM.
