MANILA -- A group led by Philippine ports tycoon Enrique Razon has pitched a rescue plan to the creditors of the country's largest shipyard operator, whose recent collapse attracted interest from foreign companies and the Philippine government.
Razon in early February expressed interest in the Subic Bay facility of Hanjin Heavy Industries and Construction Philippines, or HHIC-Phil, after it filed for corporate rehabilitation in early January. On Thursday, he said his group has started engaging the five local lenders, which now own part of the shipyard after converting debts of $412 million into equity.
"We're still making presentations to the banks [and] we're developing a master plan for Hanjin," he told reporters on the sidelines of an International Container Terminal Services' stockholders' meeting.
Razon is president and chairman of ICTSI, which operates over 20 ports worldwide, including one in Subic. He also controls casino operator Bloomberry Resorts and has interests in water and energy infrastructure.
A successful bid by Razon will bring the strategic site into the hands of a Filipino as Chinese shipbuilders' interest in the property had raised security concerns from the defense establishment. Philippine Navy chief Robert Empedrad told the Nikkei Asian Review in February that the Navy wanted a minority stake in the shipyard rescue and that he preferred a Philippine company in partnership with a South Korean or U.S. shipbuilder as the white knight.
The 300-hectare yard is located in Subic, a former U.S. naval base, which opens to the South China Sea, where Beijing is building up its military presence, including those areas that Philippines, Brunei, Malaysia and Vietnam claim as part of their territories.
Razon is considering converting the site into a multi-purpose industrial complex, which could include a port. "It's a very large facility, so it will be several [operations]. We don't want anything to do with shipbuilding," Razon said.
"The Philippines is not really competitive in this area, nothing that the shipyard uses is made in the Philippines, unlike Japan, China and Korea. They make the steel, the machinery, all of that," he added.
Razon said engaging a partner is "part of the discussions," but he declined to elaborate further.
Dutch shipbuilder Damen Group and another U.S. shipbuilder are among those that have conducted due diligence in Hanjin, according to Rosario Bernaldo, the receiver in charge of administering the corporate rehabilitation. A spokesperson for Damen earlier said it was exploring options for the shipyard, including partnerships.
Hanjin had invested $2.3 billion in the area since 2006, and had delivered 123 vessels by 2018, cementing Philippines' position as a major shipbuilding nation. The shipyard, which once employed over 30,000 staff during its peak, closed in February but the company kept a few hundred staff to maintain the site.
Bernaldo in February said she preferred a shipbuilder to take over so as to preserve the facility and jobs, but the Subic Bay Metropolitan Authority said the site could be converted into a different business.
"The banks definitely want to get rid of it. The bank only cares to be paid back," Razon said.