Two Chinese shipbuilders have expressed their interest in buying the Hanjin Heavy Industries and Construction Phillipines shipyard, prompting concern from policy and defense analysts. HHIC Phil owes $900 million to South Korean lenders and $400 million to five Philippine banks, making it the largest corporate bankruptcy in the Philippines’ history.
Mainly, the interest of Chinese builders has raised concerns in the Philippines.
More specifically, former Philippine Navy chief Alexander Pama published a Facebook post warning that the Hanjing shipyard is not only about business, financial or economic issues. It’s a matter of national security, he quoted.
The ownership of Hanjin shipyard in Subic Bay will give the owners unlimited access to one of our most strategic geographic naval and maritime asset. Although it is a commercial shipyard, nothing can prevent the owners from making it into a de-facto naval base.
Moreover, Government’s spokesman Salvador Panelo, addressed that if the interested parts are Chinese companies that the Philippines used to deal with, they can proceed. Yet, if not the Government will have to vet. For the time being. all these are speculations, according to the spokesman.
Generally, HHIC Phil began building out its giant new yard on Luzon’s Redondo Peninsula in 2006, and over the past decade it has set new records for Phillipine shipbuilding.
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The yard deploys 23,000 workers and $1.6 billion in capital value, and is placed among the largest businesses in the area. In 2017 it delivered its first 300,000 dwt VLCC, the first vessel of its type and possibly the largest vessel ever made in the Philippines. Today, it owes large amounts of money to S. Korean lenders and Philippine Banks.
Concluding, the shipbuilder has filed for court protection and submitted a rehabilitation plan, and with the government’s help it is seeking new investors. According to Board of Investments (BOI) director Ceferino Rodolfo, two Chinese companies, including a state-owned enterprise, have expressed interest in taking over the yard.