• Udenna files notification with PCC for 2GO deal

Dennis Uy’s Udenna Corp. has finally filed a notification with the Philippine Competition Commission (PCC) for its $120 million acquisition of KGL Investment B.V., which partly owned 2GO Group shareholder Negros Navigation Co. Inc. (Nenaco).

PCC chairman Arsenio Balisacan said the company has paid the penalty of P19.7 million and, likewise, filed a notification instead of bringing the matter to court.

The government’s anti-trust body is already in the process of finishing its review on Udenna’s filing and expects to come out with its decision within the month, Balisacan said in an interview on the sidelines of the 51st Asian Development Bank Annual Meeting on Friday.

The PCC ruled last January that Udenna failed to notify the commission of its transaction as mandated under the Philippine Competition Act. The $120 million (P6.1 billion) deal was way above the P1-billion threshold for transactions covered by the PCC.

Soon after the PCC issued its ruling on Udenna, the company said it had sufficient basis to challenge the PCC decision either by filing a motion for reconsideration with the PCC, or through a petition to the Court of Appeals.

It also criticized the decision to impose a penalty of P19.7 million, saying it was unduly harsh and uncalled for, particularly considering the interest of the Udenna Group’s many stakeholders and the decision’s effect on business.

However, the PCC said the penalty is stipulated under Section 17 of the Philippine Competition Act which state that parties that fail to notify the PCC of a transaction that meets the threshold are slapped with a fine ranging from one percent to five percent of the transaction value.

Udenna had bought the entire shareholdings of KGLI Coop in KGL Investment B.V. (KGLIBV) in 2016. At the time of the transaction, KGLI-BV owned 39.71 percent of KGLI-NM Holdings Inc. (KGLI-NM), a Philippine company that partly owned Nenaco.

Udenna and KGLI Coop initially sought to be excused from notification, claiming the buyout did not satisfy the “size of transaction test” required under the PCA and its implementing rules.

This developed as Balisacan said Uy also has a number of transactions in the pipeline for mergers or acquisitions that are pending with the PCC as he continues to grow his empire.

Uy has already hinted of expanding to infrastructure, telecommunications and other utilities on top of his already growing portfolio of businesses which includes logistics, petroleum, and shipping.

During the annual stockholders meeting of Uy’s listed logistics company Chelsea Logistics Holdings Corp. (CLC) in Davao last March, shareholders approved amendments to the Articles of Incorporation of the Company, enabling it to expand the primary purpose of the CLC to include infrastructure facilities and systems.

At present, the Udenna Group, CLC’s parent company, is comprised of a dynamic group of companies engaged in diverse businesses including petroleum and oil (Phoenix Petroleum), shipping and logistics (CLC and 2GO), real estate and property development (Udevco), education (Enderun), and convenience stores (FamilyMart).