BusinessMirror January 19, 2020

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Sunday, January 19, 2020 Vol. 15 No. 101

P25.00 nationwide | 2 sections 20 pages | 7 DAYS A WEEK

Desperately waiting for white knight

AERIAL photo of the Hanjin shipyard in Subic reveals two vessels that are being built at Drydock 6.

S

Text & photos by Henry Empeño

UBIC, Zambales—Like giant fishes out of water, the two ships awaiting completion here on Drydock 6 of Hanjin’s Redondo Peninsula shipyard mirror the sad state of the Koreanowned facility that had once put the Philippines on the map as the fifth largest shipbuilding country in the world.

The vessels being built, respectively known as Project 166 and Project 167, are crude oil tankers reminiscent of the bulkers that Hanjin-Subic annually turned out by the dozen until just two years ago. Insiders said one of the vessels is already 85 percent finished, while the other 65 percent

complete. But these could very well be the last ships that Hanjin would build here before the financially troubled operation is taken over by another investor. Or totally goes under. It has been one year since Hanjin Heavy Industries Corp.Philippines (HHIC-Phil) stumbled and fell hard.

DISPLACED worker Jose Gardoce Jr. keeps a positive outlook at home despite financial difficulties.

PESO EXCHANGE RATES n US 50.7600

Then the biggest foreign company in the Subic Bay Freeport Zone with foreign direct investments totaling $2.3 billion, HHIC-Phil went to court on January 8, 2019, and filed for voluntary rehabilitation under Republic Act 10142, otherwise known as “An Act Providing for the Rehabilitation or Liquidation of Financially Distressed Enterprises and Individuals.”

Rise and fall

THE move stunned shipyard workers and caught even the Subic Bay Metropolitan Authority (SBMA), the manager of the Subic Bay Freeport Zone, by surprise. More significantly, it sent shockwaves across the Philippine business community, which had watched, and, as it turned out, partly financed the meteoric rise of the South Korean shipbuilder since it broke ground here in 2006. As the BusinessMirror reported a day after Hanjin’s fateful court visit, the company “still sounded optimistic” barely two months earlier when it announced the delivery of two units of 114,000-deadweight crude oil tankers to its Singapore-based client, Eastern Pacific Shipping (EPS). At about that time, Hanjin also reported on its website that it would provide EPS “two more tankers of the same kind for delivery in the first quarter of 2019.” Having delivered 123 vessels since July 2008, HHIC-Phil was considered a behemoth too big to fail. But as SBMA Chairman Wilma T. Eisma would confirm after Hanjin went to court, the firm owed some $400 million in out-

VACANT housing units at the workers’ village.

standing loans from Philippine banks, aside from $900 million in debts with lenders in South Korea. “The bottom line is that the company said it does not have enough cash to repay its loans, and that it cannot continue with its operations under these circumstances,” Eisma, who had met with a top HHIC-Phil official days before, said then. And while the company had, at that time, six pending multimillion-dollar new building projects, these may have to be canceled if a rehabilitation plan does not materialize, Eisma also said then.

Financial disaster

WHEN giants fall, ordinary mortals get crushed under. And while HHIC-Phil has effectively availed itself of court relief from its creditors, its financial ruin had produced a domino of fallouts that had financially dislocated shipyard workers and crippled local downstream businesses as well. Following Hanjin’s filing for rehabilitation in January last year, the BusinessMirror spoke to some of the 7,000 newly laid-off workers at the Hanjin Village in Castillejos, Zambales, and learned that most did not have prospects for alternative

sources of livelihood. “Hindi na rin kami magtatagal dito kung ganito [We won’t last much longer in this condition],” Jose Gardoce Jr., one of the displaced workers then, said, as he expressed his fear of losing his house that he could no longer pay for. The same fate awaited 3,000 others who were dismissed from work in the first quarter of 2019, when Hanjin opted to retain just about 300 local workers and a few Korean supervisors to maintain the 326-hectare shipbuilding facility. Continued on A2

n JAPAN 0.4609 n UK 66.4042 n HK 6.5316 n CHINA 7.3779 n SINGAPORE 37.6866 n AUSTRALIA 35.0142 n EU 56.5416 n SAUDI ARABIA 13.5313

Source: BSP (January 17, 2020)


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BusinessMirror January 19, 2020 by BusinessMirror - Issuu