Olongapo court places Hanjin Philippines under corporate rehab

The Olongapo City Regional Trial Court Branch 72 has officially placed Hanjin Heavy Industries and Construction Philippines under corporate rehabilitation as the shipbuilder sought financial relief from its ballooning obligations to local and Korean lenders.

In a commencement order issued by Judge Richard Paradeza on Monday, January 14, the Olongapo court “declares HHIC Phil Inc. to be under rehabilitation.”

“This commencement order shall retroact to the date of the filing of the petition,” the court said.

On January 8, Hanjin Philippines filed a petition before the Regional Trial Court in Olongapo City to initiate voluntary rehabilitation under Republic Act 10142 or “An Act Providing for the Rehabilitation or Liquidation of Financially Distressed Enterprises and Individuals.”

According to the Subic Bay Metropolitan Authority (SBMA), Hanjin Philippines officials had revealed that the company owes Philippine banks some $400 million on top of another $900 million from lenders in South Korea.

The Olongapo court also ordered the company to publish in a newspaper of general circulation a copy of the commencement order once a week for two consecutive weeks with the first publication to be made seven days from the day the order was issued.

The court also ordered Hanjin Philippine to serve a copy of its petition to:

• its creditors
• Insurance Commission
• Bangko Sentral ng Pilipinas
• Bureau of Internal Revenue
• Department of Trade and Industry
• Subic Bay Metropolitan Authority
• Securities and Exchange Commission
• Department of Labor and Employment
• Housing and Land Use Regulatory Board

At the same time, the company must serve a copy of the court order to foreign creditors and ensure they receive the copy 15 days before a hearing set on Feb. 8, 2019.

Creditors were also ordered to file their verified claims within five days before the February 8 hearing.

“If a creditor files a belated claim, he shall not be entitled to participate in the proceedings but shall be entitled to receive distributions arising therefrom if recommended and approved by the rehabilitation receiver, and approved by the court,” the Olongapo City RTC.

Creditors, government agencies, and all interested parties were compelled to serve Hanjin Philippines a verified comment or opposition to the petition before the hearing on February 8.

The court is prohibiting the company’s supplier of goods and services from withholding supplies and services in the ordinary course of business as long as Hanjin Philippines pays for the goods and services.

All contracts not confirmed in writing by Hanjin Philippines within 90 days after the commencement order was issued are considered terminated.

Hanjin Philippines was the biggest foreign investor in Subic Bay Freeport Zone.

It was established in 2006 as a subsidiary of South Korea’s Hanjin Heavy Industries & Construction Co. Ltd. Parent Hanjin Heavy is a multi-national company that provides shipbuilding, construction, and plant services in South Korea and internationally.

In the course of its operations, the subsidiary became the biggest employer among all registered businesses in the Subic Bay Freeport Zone with some 30,000 employees at peak season, and was recognized by both the Philippine Exporter Foundation  and the Department of Trade and Industry as top export performer. —VDS, GMA News