Business Mirror
by VG Cabuag - June 17, 2015 0 89
TUGBOAT operator Harbor Star Shipping Services Inc. may do a follow-on offering or seek project financing deal overseas if it bags a long-term contract to do a hauling service of coal to an Indonesian power plant operator.
Company Chairman Geronimo Bella Jr. said that Harbor Star is in talks with the main service provider of the Indonesian state-owned power plant to become one of the firms that will deliver coal to the facility for the next 15 years.
Bella said that with the deal, it may invest some $10 million for the purchase of 10 tug and barge tandem that will be used for the said project, which could be the company’s biggest overseas venture so far.
He did not give other details since talks are still ongoing but said that the company may meet again with its Indonesian counterpart by next week.
Leah Vasquez, the company’s chief finance officer and compliance officer, said that a follow-on offering at the Philippine Stock Exchange is only one of their options but they may also do a project finance.
“China Trust [Banking Corp.] is our main bank here. They have a branch in Jakarta and they will support us in the deal. But follow-on offering is also on the table because the deal is huge for us depending on the volume [of coal] that we will take,” she said.
Vasquez said the company will buy second hand vessels from either Japan or Singapore with age between 5 and 15.
From the 10 sets of tugboats and barges, with each has a capacity of about 8,000 tons, and the company may haul some 6 million metric tons of coal per month. The coal will also come from various parts of Indonesia, the world’s largest archipelago with more than 17,000 islands.
The said Indonesian contract is part of the company’s push to expand its operation in top Southeast Asian nations such as in Malaysia and in Vietnam as its business at home is slowing down due to the ongoing port congestion.
“The effects of the 2014 port congestion will still be felt as shipping lines calling the Philippines have reduced their scheduled voyages,” Geronimo said during the company’s stockholders’ meeting.
In Malaysia, it already started its operations but he said it was “a bit slow” since the company is a new entrant while the Vietnamese venture is still in its infancy.
“As I mentioned we want the operations to normalize before I jump into another project,” Geronimo said.
As of December 2014, Harbor Star has established operations in 13 base ports all over the country, providing services to approximately 5,214 ship calls. source
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