Cerberus, shipyard owner Hanjin Heavy Industries and Construction of South Korea, and creditors are finalizing documentation and plan to close the deal by April 15, three people familiar with the negotiations told Nikkei Asia.
“It’s almost a done deal,” said one. Another said Hanjin is set this week to transfer to a Cerberus affiliate the 50-year lease on the 300-hectare yard in Subic Bay, a former U.S. naval base turned economic zone.
The exact terms and value of the deal are still unknown. Cerberus did not immediately respond to a request for comment, while Hanjin’s Philippine office could not be reached.
The deal is expected to revive the strategic shipyard, which was a major employer in the Philippines before it filed for bankruptcy protection in early 2019. The shipbuilder sank into financial trouble amid an industry-wide oversupply of cargo vessels, and defaulted on $1.3 billion in loans, including $400 million from Philippine banks.
Cerberus has been in exclusive talks with Hanjin creditors since 2019, but the completion of the deal has partly been delayed by the COVID-19 pandemic.
Chinese investors had previously expressed interest in the yard, sparking national security concerns and opposition from the Philippine defense establishment.
The Subic shipyard opens on to the disputed South China Sea, where Beijing has been boosting its military presence to assert its expansive claims over the waterway.
With its deep harbor, Subic Bay was a U.S military facility for 90 years, and served as a critical supply and maintenance hub during the Vietnam War and the Cold War.
After the Philippine Senate rejected the renewal of bases agreement in 1991, Subic was developed into a freeport and industrial zone, attracting manufacturers and other foreign business. It was FedEx’s regional hub until 2009.
In 2019, Australian shipbuilder Austal, which has operations on the central Philippine island of Cebu, said it would be involved in the yard’s revival. The Philippine Navy has sought a space in the northern portion of the yard for its maritime security operations.
“Austal remains in discussions regarding the potential involvement in the former Hanjin facility at Subic,” Dave Shiner, Austal’s regional director for Asia, told Nikkei.
Hanjin invested $2.3 billion in the yard since 2006, and had delivered over 120 vessels by 2018 prior to its bankruptcy. The company employed over 30,000 during its heyday, helping make the Philippines one of the world’s largest shipbuilding nations.
