- March 6, 2017
- News & Events, Press Releases
Harbor Star to acquire six secondhand tugboats as it looks to expand in Asean
HARBOR STAR Shipping Services Inc. said it plans to spend at least P300 million this year, mainly for the acquisition of six secondhand tug boats from Japan as it expands its operation overseas.
Geronimo Bella Jr., the company’s president, said it has already purchased the vessels, which it will deploy to its Malaysian operation, by the middle of the year. The average age of the vessels is 15 years old, he said.
“We no longer see expansion opportunities in the domestic market. If we will expand, it would be in the international market, mainly in Indonesia and Myanmar,” he said.
Harbor Star, which mainly gets its revenues from services to the companies, hit a snag on its international expansion by transporting coal in Indonesia two years ago. Southeast Asia’s largest economy stopped coal shipments after authorities placed stricter rules on mining, revoking some of the mining licenses, while financing for coal-fired power projects were stopped.
Harbor Star was supposed to have a coal-hauling contract to supply Indonesia’s power plant. Instead, Bella said the company focused on transporting construction materials to several islands in the Philippines, as the country’s economy grows
He said, however, there’s not much growth seen in its home country and the only way to grow is to go out in other areas in Southeast Asia.
Company shareholders on Monday approved the company’s plan to raise P1 billion in follow-on offering, issuing 300 million to 500 million shares or approximately 17.5 percent to 25 percent of outstanding common shares. The offering may be done by the third quarter of the year.
The company remains in discussion with a potential underwriter for the sale.
Geronimo said about two-thirds of the proceeds will be used for Harbor Star’s tugboat business.
He said Harbor Star has a standing contract in Malaysia for the delivery of oil into a still underconstruction tank farm expected to be completed by January 2018.
A similar contract was also signed in Myanmar where the company also committed two tugboats that will start service upon completion of the facility in the third quarter of the year.
In Indonesia Harbor Star is in talks with Indonesian firm PT Pertamina for the delivery of two tugboats to service the latter’s port operations.
The rest of the proceeds will go to the firm’s new solar-power venture that Geronimo said may be closed by the latter part of the year.
Bella said the company may ink an agreement that will allow the firm to put up a 25-megawatt (MW) to 275 MW of solar-power harvesting facility that signals the firm’s diversification into the energy business.
Geronimo said Harbor Star is looking at a five-year service contract for the power venture. “We saw more opportunities in that [solar power] business,” he said.