Hanjin Heavy Industries & Construction Philippines (HHIC-Phil) in Subic Bay has stopped production and is being maintained by a skeleton workforce of just 300.
Today’s situation marks a dramatic turnaround at the HHIC-controlled shipyard, which at the peak of its power employed more than 34,000 workers.
HHIC-Phil's technical assistance has been cut from 150 South Korean engineers to just 10.
Sources close to the yard say it ended production in mid-February following its court rehabilitation application and a $400m loan default.
The closure puts a major question mark over the future of the remaining four LR2 tankers under construction at the yard for CMB.
The government is understood to have approached a number of third parties to bring the yard back into production, following a decision on the rehabilitation, including Japan’s Tsuneishi Shipbuilding, which controls Tsuneishi Heavy Industries (Cebu) in the Philippines.
Approaches from China to take an equity stake in HHIC-Phil have been rebuffed, according to local yard sources. Local papers have said Damen Shipyard from the Netherlands has also shown interest.
A decision on HHIC-Phil’s rehabilitation is not expected until April.
“About 75% of the top management staff at HHIC-Phil have left and it’s been left with just a skeleton team,” one shipbuilding source said. “It’s a first-class shipyard but now it seems empty.”
HHIC-Phil was set up during the shipbuilding boom in 2006 by South Korea’s HHIC.
HHIC was reported to have invested $2.3bn in building the facility, including two dry docks with an annual maximum delivery capacity of close to three million dwt.
HHIC is now withdrawing from the financially troubled yard in the Philippines. In February, HHIC, together with its South Korean creditors, agreed to transfer all of the assets of the Subic-based yard to Philippine creditors. HHIC also gave 20% of its newly issued shares worth $150m to banks in the Philippines.
When the process is completed, HHIC will no longer hold any shares in the shipyard.
Since 2008, HHIC-Phil has delivered around 130 vessels to clients around the globe. The ships range from VLCCs to mega-containerships, large bulkers and gas tankers, and have put the Philippines on the map as the world’s fourth-largest shipbuilder based on gross tonnage.
