Dennis Uy’s Chelsea Logistics gets SEC approval for IPO

Chrisee Dela Paz
The Securities and Exchange Commission approves Chelsea Logistics Corporation's planned P8-billion initial public offering

'GREAT DAY.' 'This is a great day for us... I hope we can get the support of the investors,' says Chelsea founder and chairman Dennis Uy on July 11, 2017. Photo by Leanne Jazul/Rappler

MANILA, Philippines – Chelsea Logistics Corporation, another company of Davao-based businessman Dennis Uy, got approval from the Securities and Exchange Commission (SEC) to embark on its P8-billion stock market debut expected this month.

Pending the go signal from the Philippine Stock Exchange (PSE), Uy’s logistics firm can finally push through with its planned initial public offering (IPO), which involves 546.593 million new common shares at a maximum price of P14.63 each.

“This is a great day for us. Thank you. I hope we can get the support of the investors,” Uy told reporters in Makati City on Tuesday, July 11.

This development comes the same day as the 10th listing anniversary of Chelsea’s sister company Phoenix Petroleum Philippines Incorporated, an event graced by President Rodrigo Duterte – a first in the history of the local bourse. Uy was one of the major campaign contributors of Duterte.

Chelsea will be the 2nd company under Udenna Corporation, Uy’s holding company, to go public. Phoenix Petroleum Philippines made its stock market debut back in 2007.

Chelsea’s IPO paves the way for the company to join the Main Board of the PSE under the ticker symbol “CLC” and subsequently allow the investing public to trade 30% of its 1,821,977,695 outstanding shares after the offer.

The shipping company expects to net P7.59 billion from the IPO. The fresh capital is largely earmarked for the expansion of the company’s cargo and passenger shipping businesses organically as well as through acquisitions.

The company plans to run the IPO from July 21 to July 27 and debut on the local bourse by the end of the month, subject to PSE approval.

Udenna ventured into the logistics sector as early as 2006 through Chelsea Shipping Corporation to support the operations of Phoenix Petroleum, formerly the Davao Oil Terminal and Services Corporation.

Udenna’s shipping business has since grown into the country’s largest shipping group operating throughout the Philippines and Southeast Asia. It has the largest tanker fleet in terms of capacity with a total 39,271.64 gross registered tonnage.

Aside from advancing its expansion plans, Udenna is poised to further expand its footprint in the logistics sector with the planned consolidation of its stake in 2GO Group Incorporated with its other shipping businesses under Chelsea.

Udenna indirectly has 21% voting and 28% beneficial interests in 2GO. (READ: 2GO appoints new CFO, reports lower 2015, 2016 profits)

2GO’s financial performance for 2015, 2016, and the 1st quarter of 2017 shrunk, after the new management of the logistics provider asked SGV and Company to conduct a special audit.

After the special audit, 2GO reported a restatement of its financial performance for 2015 and 2016, as well as the unaudited financial statements for the 1st quarter of 2017. (READ: How SM Investments acquired stake in 2GO)

2GO clarified that its net income in 2015 was only P109.131 million. This is a 90% slide from the P1.08-billion profit 2GO earlier announced in its 2015 annual report.

For 2016, 2GO said in the disclosure that its restated net income is P344.035 million, 74% lower than what was stated in its 2016 annual report.

The SEC is set to summon current and former 2GO management and auditing firms for its probe into the “overinflated figures.” –

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