Shaken by market volatility, Harbor Star shelves IPO plan

Tugboat operator Harbor Star Shipping Services Inc. has deferred a P593-million initial public offering plan to September given the recent volatility in the stock market.

The Philippine Stock Exchange said in a July 10 memorandum that Harbor Star believes that “current market conditions are less than ideal to undertake and launch the offering.”

Harbor Star would have been the first company to brave the IPO scene since the global market received a jolt from the US Federal Reserve as it announced that it would pull back its aggressive bond buyback activities meant to stimulate the world’s largest economy.

The company’s offering period was originally scheduled to run from July 22 to 26. The listing had been set on Aug. 2.

After a consultation with its lead underwriter Abacus Capital & Investment Corp., Harbor Star said it’s “looking at a new offer period” sometime in September 2013.

The PSE earlier approved Harbor Star’s offering of up to 181.6 million shares at a maximum price of P3.27 a share. This transaction will put 30 percent of its stock in public hands. Post-IPO market capitalization is estimated at P1.98 billion.

Proceeds are expected to be disbursed as follows: acquisition of tugboats for domestic and international expansion and refleeting (P227.4 million), acquisition of barges or tug and barge pairs for lighterage operations (P120 million), settlement of the bridge loan for the purchase of vessels (P120 million) and debt retirement (73.4 million). All these expenditures are targeted to happen by the third quarter of this year.

Harbor Star, which opened for business in 1998, operates a fleet of 27 tugboats in various ports throughout the Philippines.

The company’s tugboats are deployed for ship salvaging, wreck removal, fire-fighting, oil spill abatement and recovery, handling of hazardous chemical, deep sea towing and diving and underwater searches.

The tugboats, which are operated in the ports of Bataan, Batangas, Quezon, Cebu, Dipolog, Iloilo, Cagayan de Oro, Bohol, Leyte and Davao, are also used to transport products such as oil, petroleum and mineral products from large deep-water vessels to smaller vessels.  Doris C. Dumlao