19feb12-Razon nod awaited on Hanjin takeover
POSTSCRIPT / February 12, 2019 / Tuesday
Razon nod awaited on Hanjin takeover
HAS the administration found in “Ports King” Enrique K. Razon Jr. the white knight who could take over the troubled Hanjin shipyard in Subic Bay and forestall the layoff of thousands of Filipino workers, while preventing the facility’s falling into the hands of Chinese operators?
There is no official confirmation of Razon’s interest in Hanjin Heavy Industries and Construction Corp., which has filed for bankruptcy after suffering cash flow problems affecting payment of its $412-million loans from Manila banks and another $900 million from South Korean lenders.
Trade Secretary Ramon Lopez, who leads the search for Hanjn’s replacement, has told the STAR that Razon with an estimated net worth of $4.3 billion in 2017 could be it, if he wants, considering his vast experience in ports operations and related fields.
Razon himself has been non-committal, simply noting that Hanjin has the infrastructure in place for a possible industrial complex that includes container port facilities, a liquefied natural gas terminal, dry bulk handling facilities and an LNG power plant.
The 58-year-old tycoon added that there could also be a smaller ship building and ship maintenance facility on the site, like in some of the ports he operates in many places in the world from Manila to Madagascar.
Manila-listed International Container Terminal Services Inc., where Razon is chair and chief executive, operates in the country the Manila International Container Terminal; Bauan International Port in Batangas; Davao Integrated Port and Stevedoring Services Corp. in Davao City; Laguna Gateway Inland Container Terminal in Laguna; Hijo International Port Services in Davao Del Norte; New Container Terminals 1 and 2 in Subic Bay; Mindanao International Container Terminal Services Inc. in Misamis Oriental; and the South Cotabato Integrated Port Services Inc. in General Santos City.
Abroad, ICTSI also operates ports in Pakistan, Indonesia, Australia, and China, as well as ports in Africa, the Americas, Europe, and the Middle East.
As an independent business with no shipping, logistics or consignee-related interests, ICTSI is able to work and transact transparently with any stakeholder in the port community.
The possible entry of Razon would be a great relief to security-conscious sectors who have voiced concern over the possible takeover of Hanjin’s Subic Bay facility by state-controlled Chinese firms that are into shipbuilding, repair and ports operation.
Hanjin laid off last December over 7,000 of its 30,000 employees (total number at its peak). It reportedly plans to terminate 3,000 more early this year, and keep about 300 local workers and a handful of Korean supervisors until March for facility maintenance
Subic Bay Metropolitan Authority reported recently that Hanjin has invested $2.3 billion in its facility. Since 2008, Hanjin has delivered 123 vessels to clients across the globe, putting the Philippines on the map as the world’s fourth largest shipbuilder based on gross tonnage.
• Warning raised against Chinese takeover
CONCERNED sectors have warned that Chinese takeover of the Hanjin shipyard in Subic Bay, formerly a major base of the US Navy in the Pacific, is fraught with security implications that the administration must weigh alongside with political and economic considerations.
Some Chinese shipbuilding firms, one of them state-owned, have shown interest in taking over, triggering warnings from security-conscious quarters that control of Subic Bay could give China, which has shown expansionist intentions, a strategic toehold close to the national capital.
Security is a serious element, considering China’s unfriendly acts of building up and militarizing features in Philippine maritime areas and its luring the administration into massive borrowing that experts have warned could be debt traps.
Former Navy chief Vice Admiral Alexander Pama (2011-2012), for one, has warned in a Facebook post: “This Hanjin shipyard issue is not just about business, financial and other economic issues. This is a very significant national security issue!” https://tinyurl.com/y74pn5mb
He added: “Ownership of Hanjin shipyard in Subic Bay will give the owners unlimited access to one of our most strategic geographic naval and maritime assets. Although it is a commercial shipyard, nothing can prevent the owners from making it into a de-facto naval base and a maritime facility for other security purposes.”
Some of the Chinese firms that have expressed interest are into shipbuilding and repair of civilian AND MILITARY vessels. One of them has reportedly written a formal letter of intent.
The firms’ representative based at the Ortigas Center reportedly has also signified their being open to partnering with Philippine investors. This has prompted a watch over known cronies of President Duterte with deep Chinese connections.
Depending on the agreed terms of a possible Chinese takeover of Hanjin, the foreign investor could let in navy and coast guard vessels of China into Subic Bay, like they now do in Davao, the home base of Duterte.
A number of Chinese firms reportedly have conducted due diligence on Hanjin way back in November 2017, inspected the Subic shipyard and sat down for talks with Hanjin executives.
It is not clear if the projected takeover, once it materializes, would be a business matter just between Hanjin and the new investors – such as assumption of loans and/or transfer of shares of stock — or if the transfer or takeover will be subject to the review and approval of the Philippine government.
(First published in the Philippine STAR of February 12, 2019. Follow the author on Twitter as @FDPascual.)
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