Private equity company Cerberus Capital Management and South Korea's HD Hyundai Heavy Industries (HHI) have entered into an agreement for the lease of the Cerberus-owned Agila Subic Shipyard at the former US Naval Base Subic Bay in the Philippines.
HHI, acting on behalf of parent company HD Korea Shipbuilding and Offshore Engineering, will use the leased site for the manufacture of offshore wind power substructures and the expansion of its ship maintenance, repair, and overhaul (MRO) business.
Located 110 kilometres north of Manila, the Agila Subic facility also sits on the site once occupied by Hanjin Heavy Industries and Construction Philippines (HHIC-Phil). HHI established a logistics support centre at Subic in 2022 to provide MRO support for vessels delivered to the Philippine Navy.
Speaking to reporters on Tuesday, May 14, Philippine President Ferdinand R. Marcos Jr. said the investment plans of Cerberus and HHI will restore shipbuilding capability in Subic and "spur growth in the country."
Cerberus acquired the Agila Subic site in April 2022, three years after HHIC-Phil filed for bankruptcy for having incurred debts equivalent to US$412 million.
Prior to declaring bankruptcy, HHIC-Phil had engaged in the construction of very large crude carriers (VLCCs) and other commercial ships for overseas customers.
HHI will initially focus on the construction of offshore wind platforms. The company is expecting to invest approximately US$550 million in the Subic facility over the next 10 years.
