MANILA – Department of National Defense (DND) Secretary Delfin Lorenzana said he sees no security implications with an American company now poised to acquire and operate the cash-strapped Hanjin Heavy Industries and Construction (HHIC-Phil) shipyard in Subic, Zambales.

“I don’t think there will be any implications on our national security. It will be the same as when Hanjin was operating it — building commercial ships,” he said in a message to reporters on Wednesday night, when sought for comment on the matter.

Reports earlier said that US equity firm Cerberus will acquire the HHIC-Phil shipyard facility for USD300 million.

“I don’t know the financial transactions regarding the Hanjin shipyard. It is the Department of Finance who is working on it in coordination with the creditor banks. I recommended that the government take over or buy the shipyard if there (were) no buyers to save the shipyard from going into disrepair and generate jobs,” the DND chief added.

Also, Lorenzana said the northern portion of the shipyard will be used by the Philippine Navy (PN) to base its big ships.

“The northern portion (North Yard) of the shipyard will be occupied by the PN to be the home port of our frigates and other big ships,” he added.

The PN is eyeing to convert and use 100 hectares of HHIC-Phil’s North Yard into an installation that will house the Philippine Fleet, Naval Sea Systems Command, Naval Installation Command, and the Amphibious Assault Battalion.

The North Yard is located near HHIC-Phil’s Graving Dock No. 5 (also known as a dry dock) and is used to construct, repair, and maintain ships.

The PN has always been interested in occupying a part of the HHIC-Phil in Subic Bay due to the presence of a deep-sea harbor that can be used to accommodate its strategic sealift vessels and larger patrol ships.

HHIC-Phil’s harbor has a minimum depth of about 10 meters which can accommodate the draft of the Tarlac-class landing docks and Del Pilar-class offshore patrol vessels and new missile frigates.

Draft refers to the vertical distance between the waterline and the bottom of the hull or keel.

Aside from having a deep-sea harbor, the facility is also protected by mountains and the nearby Grande Island. HHIC-Phil has a total of USD1.3 billion outstanding loans — USD400 million from Philippine banks and USD900 million from South Korean lenders.

In January 2019, the shipbuilder filed a petition before the Olongapo City Regional Trial Court “to initiate voluntary rehabilitation under Republic Act 10142, otherwise known as An Act Providing for the Rehabilitation or Liquidation of Financially Distressed Enterprises and Individuals”. (PNA)