Newly appointed Subic Bay Metropolitan Authority (SBMA) Chairman and Administrator Rolen C. Paulino Sr. announced the takeover by American investment firm Cerberus and Agila of the shipbuilding facilities of South Korea’s Hanjin Heavy Industries and Construction Philippines, which stopped operation in early 2019, displacing around 3,000 workers, at the Subic Bay Freeport Zone.
Paulino, a former Olongapo City mayor, revealed the takeover at the formal turnover ceremonies Monday, March 7, the reins of SBMA leadership from previous Chairman and Administrator Wilma Eisma, who will be serving as director of state-owned Development Bank of the Philippines. Paulino expressed hopes for more jobs creation with the entry of the Cerberus and Agila.
A bid bulletin for the project reinsurance of the industrial all risks insurance of the SBMA/ Agila NY Naval Inc. / Agila South Inc. / Agila Services Inc. was also posted on the website of the Government Service and Insurance System (GSIS) on Feb. 1, 2022.
The post also put February 25, 2022 as the tentative date of transfer of operations of the shipyard facility to Cerberus, but the same post said that GSIS has yet to secure a copy of the contract from the new owner.
It also added that the new owner of the shipbuilding facilities did not provide details as to plan construction, rehabilitation, and testing of machinery.
The post said Cerberus will be the locator of SBMA and will also be leasing the shipyard facility to the tenants/occupants. One of the lessees is the Philippine Navy (PN), which will occupy the Northern Yard.
Austal of Australia, one of the shipbuilders that announced keen interest on Hanjin Subic, is no longer a tenant/occupant, the post said.
No production is going on at the site besides light warehousing, site security, clean-up and general maintenance but the PN is said to ramp up operations in the Northern part of the yard post-closing.
These operations will include billeting, office work, light warehousing and docking and general ship operations.
It added that the SBMA interest is solely in the land and the residual interest at the end of the 50-year land lease.
Also, it said, that the insured is leasing 100 percent of the land from SBMA. The insured is sub-leasing land and leasing land improvements to two tenants who will jointly occupy about 40 percent of the entire perimeter.
Most of the losses history of the facility, the post said, come from the equipment such as the semi-fixed equipment and utilities. Other operational equipment, machineries and vehicles are not included, the post said.
The Hanjin Subic shipyard is one of the major shipyards that catapulted the Philippines to become the fifth largest shipbuilding country in the world.
The Korean-owned HHIC-PH filed for bankruptcy protection in January 2019 after failing to repay $1.3 billion loans in what is regarded as the country’s largest-ever corporate default.
Several potential bidders came up including interest from North American, German, Turkish, and other Asian companies. Chinese bidders have also expressed interest