Shipping business joins roster of IPO hopefuls
BUSINESSMAN Dennis A. Uy is taking his shipping venture public to accelerate its expansion, at a time the country’s conglomerates have begun dipping their toes in logistics.
Chelsea Logistics Corp. (CLC) filed an application on April 21 with the Securities and Exchange Commission ( SEC) to raise as much as P8 billion from the sale of 546.59 million primary shares at a maximum price of P14.63 each, the company said in a statement, citing its prospectus.
Shares up for sale comprise 30% of its 1.82 billion outstanding shares after the offer.
BDO Capital & Investments Corp. was hired as issue manger, lead underwriter and sole book runner of the IPO.
The offer period is tentatively scheduled on June 21- 27 with listing on the Main Board of the Philippine Stock Exchange under the trading symbol “CLC” set on July 5, subject to approval of the SEC and the bourse.
The IPO’s P7.59- billion net proceeds will bankroll expansion of the company’s cargo and passenger shipping businesses organically and through acquisitions.
“We are accelerating the expansion of Chelsea Logistics, with a view to making it the prime mover of goods and passengers in the Philippines,” the statement quoted Mr. Uy, founder and chairman of the company, as saying.
Chelsea Logistics said it will take advantage of initiatives to strengthen cooperation and promote trade in Southeast Asia.
The company is the logistics arm of Udenna Corp., Mr. Uy’s holding firm.
This will be the second company of the businessman from Davao to list on the stock exchange after oil retailer Phoenix Petroleum Philippines, Inc.
Chelsea Logistics has two subsidiaries engaged in shipping: Chelsea Shipping Corp. engages in maritime conveyance or carriage of petroleum products, goods, wares and merchandise in the Philippines, while Trans-Asia Shipping Lines, Inc. transports passengers and cargo both within Philippine territorial waters and/ or in the high seas.
Chelsea Logistics also owns Mr. Uy’s shareholdings in Negros Navigation Co., Inc. ( Nenaco), the largest shareholder in 2GO Group, Inc., after the IPO candidate acquired the outstanding capital stock of Udenna Investments B.V. ( UIBV) through a share swap agreement. UIBV has economic interests in KGLI-NM Holdings, Inc., which in turn has direct ownership of Nenaco.
Chelsea Logistics plans to leverage synergies with integrated transport solutions provider 2GO Group where Mr. Uy is president and chief executive officer.
“Chelsea Logistics is well-positioned to take advantage of the ecommerce industry’s rise as well as the tourism sector’s continued growth,” Mr. Uy said.
“The government’s efforts to develop much-needed infrastructure, attract more foreign investments and improve living conditions for Filipinos keep Chelsea Logistics on track to becoming a super shipping line and the country’s leading logistics company.”
Chelsea Logistics’ IPO coincides with the expansion of conglomerates Metro Pacific Investments Corp., SM Investments Corp., and Ayala Corp. to the logistics sector amid strong economic growth prospects, opportunities presented by the integration of Southeast Asia and favorable outlook of online retail.
“Logistics is the new game in town as evidenced by Metro Pacific Investments Corp.’s recent purchases. Chelsea will be a hot IPO as it has shipping and will hold Dennis Uy’s stake in Nenaco and 2GO,” BDO Capital President Eduardo V. Francisco said in a mobile phone message.
“Chelsea is operating on a much larger scale, doing crosscountry shipping. It maybe a good time to IPO and seek funding for expansion. It looks promising,” Victor F. Felix, equity analyst at AB Capital Securities, Inc., said in a telephone interview.
Eagle Cement Corp. ( P8 billion), Cebu Landmasters, Inc. (P3.8 billion), Bermaz Auto Bhd. (P1.24 billion) and Pure Energy Holdings Corp. ( P1.58 billion) have secured SEC approval to proceed with their respective IPOs.
Also pending with the SEC are IPO applications from Xeleb Technologies, Inc. for P751.8 million and Audiowav Media, Inc. for P2.66 billion.
Wilcon Depot, Inc. was the first company to go public this year, making its debut on the main board on March 31 after raising P7.03 billion.