MANILA -- An Olongapo court has formally declared cash-strapped shipbuilder, Hanjin Heavy Industries and Construction Philippines Inc. (HHIC Phil.), under corporate rehabilitation.
In a four-page "commencement order" dated Jan. 14, Olongapo Regional Trial Court Branch 72 Judge Richard A. Paradeza acted on the firm's petition filed under Republic Act 10142, otherwise known as the "Financial Rehabilitation and Insolvency Act of 2010".
In the stay/suspension order, which formed part of the court directive, the Olongapo court suspended all actions or proceedings in court or otherwise for the enforcement of all claims against HHIC Phil. Inc.
It also "suspends all actions to enforce any judgment, attachment or other provisional remedies against HHIC Phil Inc.," and "prohibits HHIC Phil Inc. from selling or disposing (of) its properties except in the ordinary course of business", as well as prohibits the firm from making any payment of its outstanding liabilities.
The court also ordered the creditors, government agencies and all interested parties to file a comment on Feb. 8 and prohibited HHIC Phil. Inc.'s suppliers of goods and services from withholding the supply of the goods and services in the ordinary course of business for as long as HHIC Phil. Inc. makes payment for the said goods and services.
The court also authorized HHIC Phil. Inc. to pay its regular administrative expenses as they become due and ruled that contracts not confirmed in writing by HHIC Phil. Inc. within 90 days following the issuance of the commencement order shall be considered automatically terminated.
The firm located in Subic Bay in Zambales employed up to nearly 28,000 persons at its peak before financial woes forced it to trim down its workforce to around 20,000 last year.
Hanjin revealed that it has USD1.3 billion in outstanding loans -- USD400 million from Philippine banks and USD900 million from South Korean lenders. (PNA)
