Some 3,000 workers of Korean shipmaker Hanjin may face layoffs after firm files for rehab

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The Subic Bay Metropolitan Authority (SBMA) on Friday said Hanjin Philippines filed a petition on Tuesday to initiate voluntary rehabilitation, due to slowdowns in the global shipping industry.

Metro Manila (CNN Philippines, January 11) — Around 3,000 workers of Korean shipmaking firm Hanjin Heavy Industries and Construction (HHIC) Philippines are at risk of losing their jobs after the company filed for corporate rehabilitation at a regional court in Olongapo City.

The Subic Bay Metropolitan Authority (SBMA) on Friday said Hanjin Philippines filed a petition on Tuesday to initiate voluntary rehabilitation, due to slowdowns in the global shipping industry.

"Manghihingi na po sila ng tulong sa korte upang makausap nila ang mga bangko [They will ask help from the courts to talk to banks] on how they can move forward in paying their debt," Atty. Wilma Eisma, SBMA Chairperson and Administrator said.

Eisma clarified however, that Hanjin is not yet ceasing operations.

"Wala pa po silang nami-miss na bayad sa utang, bayad pa po sila sa interes, wala pa pong default 'yung mga utang nila. And they are being responsible for filing the rehabilitation before that happens," Eisma said.

[Translation: They have not missed in paying debt, they have paid interest, they have not yet reached credit default.]

The SBMA said Hanjin currently has $2.3 billion in foreign direct investments, but the company owes $412 million in outstanding loans from Philippine banks.

At the peak of demand, Hanjin was able to employ more than 30,000 personnel. In 2018, 7,000 were laid off due to worsening conditions of the shipbuilding industry. Eisma says they are now down to 3,000 employees.

"Depende po sa kung ano ang mangyayari sa receivership and rehabilitation petition, maaari po silang magtanggal ng additional 3,000," the SBMA added, saying that at worst Hanjin will only keep 300 to 400 workers to continue operations in the ship repair facility.

[Translation: It depends on what will happen on the receivership and rehabilitation petition, they may lay off an additional 3,000.]

The SBMA is coordinating with the Department of Labor and Employment, as well as the Department of Public Works and Highways to address the possible layoffs.