Offers expected to purchase shipyard in Philippines

A consortium comprising Australian shipbuilder Austal Ltd and U.S. private investment company Cerberus Capital Management are expected make a purchase offer in the coming weeks for the Philippines yard of South Korean shipbuilder Hanjin Heavy Industries & Construction. A purchase offer could be made for the yard Hanjin Heavy Industries and Construction Philippines, known as HHIC Phil, which in January 2019 filed for the biggest bankruptcy in the Philippines with unpaid loan obligations amounting to US$412 million. Austal and Cerberus Capital, which have until October 31, 2019, to submit a purchase bid, are in exclusive talks with creditors and finishing up due diligence (financial checks), said the court-appointed receiver for HHIC Phil, Ms Rosario Bernaldo. The shipyard in Zambales province to the northwest of Manila is the country’s largest shipbuilder, covering 300 hectares. Mr Eugene Acevedo, chief executive of Rizal Commercial Banking Corporation, the Philippines bank with the biggest exposure to the shipyard, said he expects a purchase bid to be made in the next two to three weeks. He declined to confirm what companies were involved. “I am reasonably optimistic that we will arrive at a transaction that will give every party what they need,” Acevedo said. Five Philippine banks, including three of the country’s largest, are owed a total of US$412 million by HHIC Phil. A bid from a potential buyer would improve the chances to keep the shipyard open. It has pending contracts to build four more vessels, and its lenders believe it can secure two more orders a year to generate new business. With or without a bid, Bernaldo said she would file a revised plan for court approval by the end of October so yard restructuring proceedings can be completed by January 2020, a year after the company filed for debt restructuring. HHIC Phil has about US$1.7 billion in liabilities and US$2.3 billion in assets, according to Bernaldo’s original court report. The shipyard had a workforce of about 33,000 people at its peak, making it one of the country’s biggest employers.