Austal, Cerberus Coordinates on Scrutinizing Hanjin Philippines

Recently, an Australian and U.S. consortium announced it is in exclusive discussions to rescue one of Asia’s most strategically situated shipyards. It is at Subic Bay in the Philippines.

The proposal for the Philippines’ largest dockyard by Australian shipbuilder Austal and U.S. private equity firm Cerberus Capital Management will alleviate concerns. National security has prompted Chinese interest in the shipyard.

The plan will also raise expectations for the reinforcement of an economically valuable asset. This is at which its peak had more than 30,000 workers. Moreover, it was one of the largest employers in the country.

Earlier this year, the shipyard weakened after its South Korean-owned parent defaulted $1.3 billion in debt.

Subic, a former U.S. naval base, opens with the South China Sea. This place is where Beijing is complaining up its military occurrence to strengthen its expansive maritime claims.

Meanwhile, China’s moves have raised tensions in the region. It is with the Philippines and Vietnam disagreeing as Beijing keeps on invading their respective exclusive economic zones.

Possibilities of Changing Portion of The Shipyard

The Philippine Navy, which is reviewing the possibility of altering a portion of the 300-hectare shipyard into a naval base, positioned a ship there early this month.

In a newspaper interview, Austal CEO David Singleton indicated that his company and Cerberus were in private discussions with the creditors of the Philippine unit of South Korea’s Hanjin Heavy Industries and Construction.

Moreover, the firm had owned the shipyard for 13 years before it collapsed.

The team was anticipated to finish its due diligence in the next three months. This came after the bid price, and building of the joint venture would be known, Singleton said.

Meanwhile, an official from Cerberus and a spokesperson from the creditors did not immediately answer a request for comment.

Singleton stated, “Cerberus will do the financials. We will be with shipbuilding and ship repair, and the Navy will do their own thing.” He also added, “We like the Navy there.”

On Wednesday, Austal has already built a small and mid-size passenger vessel on the central Philippine island of Cebu. It will open a new $20 million assembly facility.