Dennis Uy’s Chelsea Logistics and Infrastructure Holdings Corporation signed an agreement to sell its entire stake in 2GO Group to SM Investments Corporation (SMIC), the company told the Philippine Stock Exchange on Friday, March 19.
Uy is divesting his minority stake in 2GO just over 4 years after acquiring it.
Chelsea is selling its 31.73% stake in 2GO Group at P8.50 per share to SMIC.
“The sale will be done through KGLI-NM Holdings, Incorporated, a 90% effectively owned subsidiary of the corporation,” Chelsea said.
SMIC currently has a shareholding of 30.49% in 2GO. The deal with Uy would mean that SMIC would get majority of the outstanding voting capital stock of 2GO, making the logistics company its subsidiary.
The deal comes as the logistics industry suffers losses amid the coronavirus pandemic.
2GO suffered a net loss of P1.8 billion in 2020, primarily due to reduced economic activity. Revenues fell by 19%.
“With the divestment, Chelsea will not be impacted by 2GO losses, which will aid the company in recovering from the current COVID-19 pandemic,” said Chryss Alfonsus Damuy, Chelsea president and chief executive officer.
“With our numerous group-wide initiatives currently being undertaken, we are confident that Chelsea will be best prepared and positioned to take advantage of the recovery of the industry as we move forward.”
Chelsea added that proceeds of the sale will be used to pay loans obtained for the acquisition of the shares.
As of September 2020, Chelsea had posted a net loss of P2.6 billion. – Rappler.com