Harbor Star purchases 60% of GenSan-based renewable energy provider
Marine services provider Harbor Star Shipping Services, Inc. (HSSSI), through wholly owned subsidiary Harbor Star Energy Corporation (HSEC), has acquired 60% of shareholdings in renewable energy services firm Astronergy Development Gensan, Inc. (ADGI).
HSSSI, in a regulatory disclosure, said HSEC entered into definitive agreements to purchase 45% of the issued capital stock of ADGI and subscribe to its primary shares for a total amount of US$6.3 million as a way to own up to 60% of the company.
The purchase price for the secondary shares and subscription to primary shares was determined through a discounted cash flow projection and a valuation of the pre-development work, licenses, permits, and entitlements of ADGI.
Of the amount, $4.668 million is to be paid by HSEC to ADGI shareholders once the deeds of assignment are executed, while the remaining $1.632 million is to be paid upon execution of a subscription agreement and increase of authorized capital stock of ADGI.
HSEC, incorporated last May, is in the business of generating, distributing, and storing electric power derived from solar energy and other renewable energy sources and fuels.
HSSSI said that by acquiring ADGI, it expects to derive additional revenues. It added that its entry in the energy sector is part of its strategy to diversify business interests with focus on core industries. By investing in solar power and in General Santos City, where ADGI is headquartered, HSSSI said it is positioning itself in the energy sector of the future and in a territory where major development will be seen in the next 10 years.
“Together with Astronergy Development Group who will maintain a 40% stake and whose key personnel have more than 20 years of experience in solar energy, TUGS’s (HSSSI) entry into Astronergy Development Gensan, Inc. will provide a new steady income stream and, necessarily, increase shareholder value,” the marine services provider said.
ADGI, a stock corporation incorporated in January 2014, is engaged in power generation derived from solar energy and other viable sources of renewable power. It is also engaged in the wholesale selling of electric power generated to private electric utilities, electric cooperatives, the spot market, and other consumers.
ADGI has permits, licenses, and entitlements to operate 25-megawatt (MW), expandable to 75MW, solar power plants in General Santos. It has been issued a certificate of commerciality by the Department of Energy and has an existing Energy Regulatory Commission ERC-approved power purchase agreement (PPA) with South Cotabato II Electric Cooperative, Inc. (SOCOTECO-II). Under the PPA, SOCOTECO-II will purchase all the energy output from the project. The construction of the initial 25MW solar power plant will be completed by the second quarter of 2018.
HSSSI president and chief executive officer Geronimo Bella, Jr. earlier disclosed plans to further diversify into the renewable energy industry, particularly into solar and hydro power plant operations.
Bella said they are holding dialogues with potential foreign partners, one from Germany, and one from China, about operating renewable energy plants in the Philippines, and hope to finalize a deal by the end of the year.
The marine services provider has been expanding its business portfolio, which now includes a new diving and marine maintenance unit, and a venture into the construction business. It is also looking to further develop and strengthen its new wholly owned subsidiary Harbor Star Subic Corporation, which offers marine-related ancillary services within the Subic Bay Freeport Zone, and to establish a joint-venture company to operate several floating dry-dock facilities in the Philippines.