Banks eye Hanjin PH debt resolution

Published May 14, 2019, 12:00 AM

by manilabulletin_admin

By Bernie Cahiles-Magkilat

Local bank creditors of Hanjin Heavy Industries and Construction Philippines (HHIC-Phil), the local unit of Korea’s shipbuilding giant Hanjin, expect resolution of the shipbuilder’s debt within the year.

Overview of the shipbuilder Hanjin Heavy Industries and Construction-Philippines (HHIC-Phil) shipyard in Subic Freeport. (MB file photo)
Overview of the shipbuilder Hanjin Heavy Industries and Construction-Philippines (HHIC-Phil) shipyard in Subic Freeport. (MB file photo)

The local Hanjin owes five local banks a total of $412 million, considered as the biggest corporate default in the country. Among the creditor banks, Rizal Commercial Banking Corp. (RCBC) has the biggest loan exposure of $140 million followed by state-owned Land Bank of the Philippines with an estimated $80 million. Metrobank has $72 million while the Bank of the Philippine Islands has about $60 million and Banco de Oro (BDO), $60 million. Aside from its local debts, Hanjin also owes $900 million from South Korean creditors.

John Thomas G. Deveras, Jr., senior vice-president of RCBC, said he expects Hanjin’s earlier debt resolution this year based on their talks with potential investors. In addition, these interested groups have also indicated willingness to go for a direct purchase.

But Deveras was “no comment” when asked if one of the potential investors is a Japanese shipbuilder.

Receiver Atty. Rosario Bernaldo, however, said that a Japanese shipbuilder has already signed a non-binding agreement for its interest in Hanjin. The bank creditors are on top of the negotiations, she said.

The Japanese investor is the latest interested party in Hanjin, which filed for debt restructuring before the regional trial court in Olongapo in January this year. According to Bernaldo, the three interested groups cited earlier “look to be serious.” These groups are the Dutch firm Damen Shipyard, an American firm, and a consortium of US, Singaporean and Italian shipbuilders. She denied that Keppel is the Singaporean firm in the consortium.

“The Italian and Singaporean firms are trying to tie-up in a consortium being arranged by a US fund management firm,” she said.

Earlier, two unnamed Chinese firms were said to be interested in Hanjin but the Department of National Defense have expressed reservations over the Chinese interest on security matter.

Wilma Eisma, administrator and CEO of Subic Bay Metropolitan Authority (SBMA), said the receiver is the first stop for interested parties and Deveras is the lead among the creditors.

The Hanjin shipbuilding facility in Subic Bay, former home to the US navy. Hanjin occupies a big property in the freeport and which could be used for other businesses. Hanjin’s operations in Subic occupies more than 300 hectares of land, with a 4km Quay Wall and two of the world’s largest docks with the size of 370m x 100m and 550m x 135m which is about seven times larger than a football stadium.

HHIC-Phil started its shipbuilding operations in the later part of 2007 following the completion of the construction of its Subic shipyard in the same year. To date, HHIC-Phil has produced 123 merchant vessels for international customers, including container ships, bulks carriers, VLCCs, and LPG ships.