South Korean shipbuilder to lease part of Philippine Subic Bay shipyard

May 16, 2024 - 9:31 AM
1252
Naval Operating Base Subic (Screengrab from video courtesy of Former Defense Secretary Delfin Lorenzana's Facebook page)

 U.S. private equity firm Cerberus Capital Management said it has agreed to lease part of its Philippine shipyard in Subic Bay to HD Korea Shipbuilding and Offshore Engineering, which plans to build a facility there to manufacture offshore wind platforms.

Cerberus said on Wednesday it has signed a multi-year agreement with HD KSOE to lease part of the 350-hectare shipyard Cerberus acquired in 2022 in Subic Bay, northeast of the capital Manila, which was home to a U.S. navy base until 1992.

The shipyard was run by Hanjin Philippines before it defaulted on loans worth $1.3 billion in 2019. Manila considers it an important asset because of its shelter, depth and access to the South China Sea.

“Hyundai will be leasing a large section of the shipyard from us and will be bringing maritime manufacturing back to Subic at a very large scale with an initial focus on offshore wind platforms,” Alexander Benard, Senior Managing Director at Cerberus, told a virtual press conference.

“This will create very substantial employment and that will really bring that economic activity and that economic vitality back to the Subic Bay region,” Benard said.

In a joint statement with Cerberus, HD KSOE said it expected to commence site preparations in the near term, with operations starting within the next 12-18 months.

HD KSOE said the state-of-the-art maritime complex it planned to build would also be capable of handling ship block fabrication, ship repairs and other services.

Other tenants at the Subic shipyard include the Philippine Navy which occupies 100-hectares, global logistics company V2X, and Cerberus-owned SubCom, a global subsea cable firm.

— Reporting by Karen Lema; Editing by Elaine Hardcastle