Harbor Star plans P300-M borrowing for tugboats, Malaysia expansion

Listed port services provider Harbor Star Shipping Services Inc. is borrowing P300 million to finance the acquisition of two more tugboats as it starts its Malaysian operations in early 2015.

 

Malaysia is the first leg of Harbor Star's regional expansion in line with the Southeast Asian regional integration by next year, corporate planning manager Danny Cleo Uson revealed during the company's special stockholders' meeting in Makati City on Friday.

 

"For Malaysia, we have already deployed our tugboat Hamal. We expect operations to start in January 2015 and increase presence there next year by buying additional tugboats," he said.

 

Harbor Star bared its plans to expand to Malaysia, Indonesia, Papua New Guinea and Vietnam when it conducted an initial public offering (IPO) in October 2013.

http://www.gmanetwork.com/news/story/333238/economy/companies/harbor-star-shares-up-2-66-on-first-trading-day-at-phl-exchange

 

The company will borrow P300 million through existing bank lines and finance the acquisition of two more secondhand tugboats, CFO Leah Vasquez told GMA News Online after the meeting.

 

"There's one candidate already for the supply of tugboat from Singapore," she said.

 

"We've worked out several term loan lines for Malaysia. We're using our current lines which will be enough to finance at least two more tugboats," she added.

 

Among its bank partners are CTBC Bank (Philippines) Corp., Allied Bank – now merged with Philippine National Bank and Rizal Commercial Banking Corp.

 

A second-hand tugboat – about five to 15 years old – costs around $2.5 to 3.5 million, cheaper compared with a brand new boat that sells from $6 to 7 million.

 

"It's not going to be cost effective [if we buy brand new tugboats]... matagal ang ROI (return on investment)," Vasquez noted.

 

In line with its regional expansion, the company CFO noted Harbor Star is targeting Indonesia next year.

 

"We're in talks with an investing company in Jakarta. We have to study it first. But hopefully that would be a good yield for us," Vasquez said.

 

She said the company is looking for opportunities in other ASEAN markets while fortifying links to those countries.

 

By 2015, the ASEAN Economic Community (AEC) sets in motion the creation of a single market spanning the 10-nation bloc which include Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam.

 

The regional expansion bodes well for its operations, considering it is the first Philippine tugboat operations to go overseas, chairman and president Geronimo Bella Jr. said in a separate interview.

 

"Even before AEC, we're already there. We're quite ahead. We've already started the setting up for example in Malaysia. Indonesia – we used to operate there," he said.

 

Apart from port services, Harbor Star specializes in ship salvage operations, wreck removal, firefighting, oil spill abatement and recovery, handling hazardous chemicals, deep sea towing, diving and underwater services.

 

Harbor Star has a fleet of 27 tugs operated at the seaports in Bataan, Batangas, Quezon, Cebu, Dipolog, Iloilo, Cagayan de Oro, Bohol, Leyte and Davao. – VS, GMA News