Aznar Shipping Corp. plans to keep its expansion within the Visayas even as the Cebu-based shipping company prepares to raise fresh capital from an initial public offering (IPO), betting there are still enough opportunities in its home market.
On Friday, company president and CEO Kyle Alexander Aznar said they have no immediate plans to venture outside the region, where they specialize in short-haul feeder routes.
‘I’d say the Visayas still has a lot of unmet demand,’ Aznar said. ‘There’s still a lot of room for us to grow.’
Aznar Shipping currently operates nine vessels, with another one coming in, according to the CEO. Its network covers Cebu, Leyte, Panay and Negros Occidental.
Shorter routes
Unlike operators plying longer routes, Aznar Shipping focuses on crossings that typically take one to three hours.
The company’s major routes include Tabuelan-Escalante, Danao-Isabel, Bogo-Palompon and Kawit-Santa Fe.
Aznar said this enables the company to complement rather than directly compete with operators that serve longer routes.
‘Some of it (routes), the end point is not really Cebu. It’s actually the neighboring islands, the neighboring provinces. That’s where we come in,’ he said.
The company is pursuing an IPO of up to one billion primary common shares, with an overallotment option of up to 100 million secondary shares.
The indicative offer price is up to P0.67 per share, subject to book building.
At the maximum price, the primary offering could generate as much as P670 million in gross proceeds. The overallotment shares could add another P67 million.
Fleet and facilities
Fleet expansion will take priority as Aznar Shipping deploys fresh capital, while plans to develop a shipyard and dry-docking facility will come later.
‘The first priority will be our fleet expansion,’ Aznar said, adding that the proposed shipyard remained in its preliminary stages.
The company is seeking to expand after a strong first half. Revenues more than doubled to P210.99 million from P100.59 million a year earlier. Net income surged 155 percent to P53.19 million.
Rolling cargo and vehicle transport generated about 86 percent of first-half revenues. Passenger transport accounted for the remaining 14 percent.