CLARK FREEPORT—At least five foreign companies are eyeing Hanjin Heavy Industries and Construction Co. Philippines at the Subic Bay Freeport Zone as “white knights” after the Korean shipbuilder declared bankruptcy in January.
Wilma Eisma, Subic Bay Metropolitan Authority (SBMA) chairman and administrator, also said that as of Wednesday last week, the five local banks that loaned money to Hanjin signed an agreement and officially formed a consortium.
Eisma said Rizal Commercial Banking Corp., BDO Unibank, Land Bank of the Philippines (LandBank), the Bank of the Philippine Islands (BPI) and Metrobank officially formed a consortium and signed an agreement they would work as one with RCBC as their lead negotiator.
Eisma identified the “white knights” as two American firms, Damen Shipyards Group of Denmark and two Asian companies backed by their governments.
Eisma made the disclosure at the “Balitaan” media forum organized by the Capampangan in Media Inc. in cooperation with the Clark Development Corp. at the Bale Balita here last Friday.
Eisma said the white knights do not include China because the government has stopped talking to China.
“Subic is very close to the contested waters with China. I think that was the reason why there was an alarm set off when the Department of Trade and Industry and the Board of Investments started talking to the Chinese government and Chinese companies, because we are just a skip and hop away from the contested waters with China. So that is something that we have to consider,” she said.
Eisma said Enrique Razon’s International Container Terminal Services Inc. (ICTSI) also expressed intention to take over the Hanjin facilities.
She said the five foreign companies are looking at shipyard operations while ICTSI wants to convert it into a mixed-use facility. The property of Hanjin is 326 hectares and the combined size of the ports in Manila is close to 220 hectares only.
“You can actually put the port volume in Hanjin with a little to spare,” she said. “As far as I know the interest of ICTSI is to look into port and some shipyard operations,”
Eisma said the property of Hanjin has a lot of potential because it has deep ports and beautiful wharfs and piers as compared during the time of the Americans 25 years ago.
“Now, with the new technology and with new engineering marvels, the one that Hanjin left is really a state-of-the-art facility,” she said.
The consortium agreed with Hanjin and the Korean Development Bank that they will take over the shipyard and be the trustee of the shipyard, she said.
“Thus, the possible white knight will have to deal with the consortium,” she added. “I am also working very closely with the secretary of finance because of the enormity of the transactions, not to mention that LandBank, which is a government-owned bank, is also chaired by the secretary of finance.”
“Hanjin spent close to $2.2 billion just to put up their own power plant, their own water system and sewage-treatment plant. The development cost of that property is a lot of money, that is why they got a very reasonable rate in terms of rent,” she said.
Eisma said that at the peak of Hanjin in 2015, they had 33,000 workers.
When they declared bankruptcy early this year, the number of workers was down to 3,000. She said that since March 1, Hanjin had 380 workers left for yard repair. Eisma said two weeks ago, P288 million was approved for release to pay the workers left by the retrenchment.
She said there is a “gradual closure” of Hanjin, which went into receivership after filing for bankruptcy. She said Hanjin claimed that it went bankrupt due to the slowdown of business and due to its heavy debt.
She identified Rosario Sheryl Bernal, an expert on receivership who used to be with the Department of Finance, as the court appointed receiver.
The receiver will now make sure it will protect its suppliers and the SBMA, she said.
Hanjin debt amounted to $415 million with $45 million already paid to Metrobank before the consortium was formed.
Eisma said Hanjin have six pending orders.
“They have a massive operation and they have purchase orders, but they cannot go to the banks because the banks refused to lend them money anymore,” she said.
Image credits: Nonie Reyes