The Nikkei Asian Review is reporting Australian shipbuilder Austal and US private equity firm Cereus Capital Management have entered exclusive talks to take over one of the world’s largest shipyards.
The pair are submitting a bid to buy Hanjin Heavy Industries & Construction’s bust yard in Subic Bay in the north of the Philippines.
The shipyard collapsed earlier this year after its South Korean owned parent defaulted on $1.3bn in loans. In the intervening months many parties have been linked with taking over the yard, which at its peak employed more than 30,000 people.
Austal CEO David Singleton told Nikkei Asian Review that his team was expected to finish due diligence in the next three months, after which the bid price and structure of the joint venture would be known.
“They (Cerberus) will do the financials. We will do shipbuilding and ship repair and the navy will do their own thing,” Singleton said. “We like the navy there.”
There is speculation that a Japanese company will join the consortium at a later date.
Austal already has a small yard on the island of Cebu in the centre of the Philippine archipelago.
Cerberus has a number of shipping-related investments already including a sizeable stake in Team Tankers.
Chinese Interest in the Hanjin Shipyard
A former chief of the Philippine Navy warned over two Chinese firms’ possible takeover of the Hanjin Heavy Industries and Construction (HHIC) shipyard in Subic, Zambales.
“Let’s be aware that this Hanjin shipyard issue is not just about business, financial and other economic issues. This is a very significant national issue!” ex-Navy chief Vice Admiral Alexander Pama said in his Facebook post.
Pama, who served as Navy chief from 2011 to 2012, warned that China’s ownership of Hanjin’s shipyard will give unlimited access to one of the Philippines 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 and a martime facility for other security purposes! Let us all be aware and wary of the serious security and other strategic implications of this issue!” Pama added.
He then urged both government and private sector to go against China’s possible ownership of the shipyard.
A former U.S. military base, the Subic Bay is around 260 kilometers away from the Scarborough Shoal — a subject of territorial dispute between the Philippines and China. Americans selected the bay as a repair and supply depot due to its strategic location, according to the Subic Bay Metropolitan Authority (SBMA).
Pama’s concern comes after reports citing that two major Chinese shipbuilders asked on the operations of Hanjin Philippines, which filed for corporate rehabilitation on Tuesday.
The said the firm filed for rehabilitation due to slowdowns in the global shipping industry.