MANILA, Philippines — American investment firm Cerberus Capital Management has inked a multiyear deal to lease to HD Korea Shipbuilding and Offshore Engineering (HD Hyundai KSOE) a portion of the former Hanjin facility in Subic for renewable energy (RE) equipment production.
Cerberus senior managing director Alexander Benard on Wednesday said that the Hyundai unit would initially manufacture offshore wind platforms, adding that assembly activities could begin in the next 12 to 18 months.
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“They will be leasing a large section of the shipyard from us and we’ll be bringing maritime manufacturing back to Subic at a very large scale with an initial focus on offshore wind platforms,” Benard said during a virtual press conference.
“This will create very substantial employment and will really bring that economic activity and that economic vitality back to the Subic Bay region,” he added, noting that a thousand jobs could be created.
Benard was asked about the value and tenor of the lease undertaken through Cerberus affiliate Agila South Inc., but declined to comment.
Resumption of shipbuilding activities
On the resumption of shipbuilding activities, the company executive said they might still need to pour in tens or even hundreds of millions of dollars to make the necessary modifications.
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Benard said that the shipyard had been mothballed for around three years, leaving huge portions in a state of disrepair.
Hanjin Heavy Industries and Construction Corp. Philippines filed for bankruptcy back in 2019, while Cerberus acquired the distressed asset in 2022.
“So, when we stepped in and took over the asset in April of 2022, we had to begin a process of revitalizing this asset and putting it back into operational condition,” he said.
“That entailed a number of mundane tasks like fixing dilapidated buildings, bringing certain structures back up to code, putting in place a management team, putting in place IT systems,” Benard said further.
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Aside from Hyundai, Benard said they had also leased other portions of the facility to the Philippine Navy, a logistics company and one of its portfolio companies engaged in the subsea fiber optic cable business.
One area is still available for leasing at the dry dock of the 350-hectare facility.
Further, the Cerberus official said they were keen on acquiring other assets located in the Philippines, particularly in the semiconductor manufacturing and assembly space.