Tugboat operator sets IPO price at P1.88 per share

MANILA, Philippines–Tugboat operator Harbor Star Shipping Services Inc. has set its initial public offering price at P1.88 per share or a total of P341.4 million.

The company is scheduled to hold its IPO next month.

The offering was priced below the earlier indicative range of P2.50 to P3.27 per share which would have raised as much as P593 million for the company.

Dealers said the company, in pricing the offer, had taken into account the volatile global market conditions that delayed plans to go public.

The company originally planned to hold the IPO in July but it was deferred following the US Federal Reserve’s signal that it would taper its bond buyback activities, triggering a shakeout of emerging market assets.

Last week, the US Fed said it would keep the $85-billion bond buying operations for the meantime, surprising market players who were expecting the tapering to begin this September. Financial markets rebounded last week after the Fed’s latest pronouncement, providing a window of opportunity for issuers like Harbor Star.

“This pricing is in line with or at a discount to the valuations of the market. This is less than 10x P/E (price to earnings) ratio while the market is doing around 12 to 15x P/E,” said broker Joseph Roxas, president of stock brokerage Eagle Equities Inc.

A P/E ratio of 10x means investors will pay 10 times the amount of money that the company is expected to make for this year.

Based on the revised timetable for Harbor Star’s IPO, the offering would run from Oct. 16 to 23 while the listing of shares on the PSE’s main board would be on Oct. 30.

Abacus Capital & Investment Corp. will manage and underwrite the IPO, which will bring to public hands 181.6 million common shares or 30 percent of the company’s outstanding stocks.