Aju Business Daily

SEOUL -- The ailing Subic shipyard run by Hanjin Heavy Industries & Construction, a mid-sized South Korean shipyard, filed for a rehabilitation program in a Philippine court due to a prolonged business slump. The court would make a decision on the fate of the Subic shipyard.  

In a regulatory filing on Tuesday, Hanjin Heavy said that its affiliate, HHIC-Phil, based in Subic, a coastal municipality northwest of Manila, was in the legal process of corporate rehabilitation. The Subic shipyard with about 4,000 workers was valued at 1.84 trillion won ($1.64 billion).

Hanjin Heavy, a Hanjin group unit, is South Korea's oldest shipyard founded in 1937. Like other South Korean shipbuilders, the Hanjin shipyard has been kept afloat with money from creditors under a government-led restructuring program.

In 2016, Hanjin Heavy received a bailout of 250 billion won. In return, the shipyard promised to raise 2.1 trillion through the sale of real estate and non-core assets. By the end of December last year, the shipyard has raised 1.4 trillion won.

For years, Hanjin Heavy has focused on the construction of naval ships, while its shipyard in Subic Bay in the north of the Philippines has built merchant ships. The parent company has gradually come back by posting an operating profit of 86.7 billion won in 2017.