Philippine Lenders Saves South Korea's Hanjin
The troubled South Korean shipbuilder Hanjin Heavy Industries & Construction Co said that it has reached an agreement with Philippine banks on debt-rescheduling for its Philippine affiliate HHIC-Phil, Southeast Asia’s largest shipyard by area size.
Philippine creditors agreed to acquire shares of Hanjin Heavy, HHIC-Phil Inc., which operates the yard in Subic Bay, in return for solving surely obligations. This means the scheme includes a debt-for-equity swap with Philippine lenders, it added.
Hanjin said the deal would be submitted to a Philippine court by the end of this month. HHIC-Phil, a debt-stricken shipyard in Subic, has applied for a rehabilitation program.
Nikkei quoted HHIC saying that Rizal Commercial Banking Corporation, state-owned Land Bank of the Philippines, Metropolitan Bank & Trust, Bank of the Philippine Islands and BDO Unibank would swap their debt to the Subic shipyard for equity in the parent company.
Meanwhile, Yonhap reported that Hanjin Heavy is also negotiating with its lenders in South Korea on the debt-for-equity swap.
According to Kyodo News, Hanjin Heavy reported impaired capital this week as its consolidated financial statement for 2018 reflected losses in HHIC-Phil. The shipbuilder plans to resolve capital impairment and improve its financial structure through a debt-for-equity swap with South Korean creditors.