Hanjin Heavy Industries Subic Shipyard in the Philippines Nears Sale to North American Company

Philippine Presidential Office Spokesperson: "Negotiations Almost Finished"

A view of Hanjin Heavy Industries Subic Shipyard.

[Asia Economy Reporter Ki Ha-young] Subic Shipyard, a subsidiary of Hanjin Heavy Industries, is expected to be sold soon to a North American company.

On the 27th, major foreign media outlets reported the sale of Subic Shipyard, citing Philippine officials. On the same day, Wilma Eisma, head of the Subic Bay Metropolitan Authority (SBMA), said, "Subic Shipyard could be operational again within the year," adding that a North American company has stepped in as a 'white knight' (an investor friendly to the current management during a merger or acquisition). However, she did not disclose which company exactly is acting as the white knight.

Harry Roque, spokesperson for the Philippine presidential office, also reportedly said at a press conference that "negotiations with investors are nearing completion," according to foreign media.

The market expects Australian defense company Austal to acquire Subic Shipyard together with the U.S. private equity firm Cerberus. Austal and Cerberus entered the bidding for Subic Shipyard two years ago. In May, local Philippine media, citing the Australian ambassador to the Philippines, reported that negotiations between Austal and Hanjin Heavy Industries were entering the final stages.

On the same day, Austal stated, "Due to confidentiality agreements, we cannot specify which shipyard we are reviewing or identify potential business partners." Cerberus did not comment.

Located at a strategic point adjacent to the South China Sea, Subic Shipyard employed up to 20,000 workers and was once ranked among the top 10 shipyards worldwide by order volume. However, in 2019, it entered corporate rehabilitation procedures burdened with $1.3 billion (approximately 1.5 trillion KRW) in debt due to financial difficulties.