Harbor Star Shipping Services, Inc. is planning to spend as much as P1 billion this year to expand its tugboat operations while diversifying into renewable energy and the chassis roll-on-roll-off business (ChaRo).
In an interview after the firm’s stockholders’ meeting, Harbor Star President Geronimo Bella Jr. said they are eyeing the acquisition of six more tugboats to support the company’s effort to expand its operations within and outside the country.
Bella said the company is also working on closing an agreement that will allow the firm to put up a 25 megawatt to 275 megawatt solar power harvesting facility.
At the same time Harbor Star is also awaiting the construction of a port in Tanza, Cavite, the completion of which will allow the company to start on its domestic chassis roll-on-roll-off (ChaRo) shuttle service.
According to Bella Harbor Star is initially planning a capital expenditure of P300 million this year although this could go up to as much as P1 billion once it pushes through with its planned initial public offering. Otherwise, it will be borrowing money for its two-year expansion program.
Harbor Star shareholders on Monday approved the company’s plan to raise P1 billion in the third quarter of 2017 via the issuance of 300 million to 500 million common shares equivalent to about 17.5 to 25 percent of its outstanding common shares.
Geronimo said about two-thirds of the expected proceeds will be used for Harbor Star’s tugboat business, where the company has standing contracts with a number of Southeast Asian firms for shipping services.
He said Harbor Star has a standing contract in Malaysia for the delivery of oil into a still under-construction tank farm that is expected to be completed by January, 2018.
A similar contract was also signed in Myanmar where the company has also committed two tug boats 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.
Geronimo said Harbor Star is acquiring an initial six boats which will cost P300 million while the balance of the proceeds of the FOO will go to the firm’s solar power venture that may be closed by the latter part of the year.
Harbor Star is looking at a five-year service contract for the power venture. “We saw more opportunities in that business,” said Geronimo.