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The Nikkei Asian Review is reporting Australian shipbuilder Austal and US private equity firm Cereus Capital Management have entered exclusive talks to take over one of the world’s largest shipyards.

The pair are submitting a bid to buy Hanjin Heavy Industries & Construction’s bust yard in Subic Bay in the north of the Philippines.

The shipyard collapsed earlier this year after its South Korean owned parent defaulted on $1.3bn in loans. In the intervening months many parties have been linked with taking over the yard, which at its peak employed more than 30,000 people.

Austal CEO David Singleton told Nikkei Asian Review that his team was expected to finish due diligence in the next three months, after which the bid price and structure of the joint venture would be known. “They (Cerberus) will do the financials. We will do shipbuilding and ship repair and the navy will do their own thing,” Singleton said. “We like the navy there.”

There is speculation that a Japanese company will join the consortium at a later date.

Austal already has a small yard on the island of Cebu in the centre of the Philippine archipelago.

Cerberus has a number of shipping-related investments already including a sizeable stake in Team Tankers.