Chelsea Logistics sells preferred shares

CHELSEA Logistics and Infrastructure Holdings Corp., a company led by Davao businessman Dennis Uy, on Monday said it raised some P500 million after it sold preferred shares.

In its disclosure to the Philippine Stock Exchange, Chelsea, which operates most of the large passenger, cargo ships and other types of vessels in the country, said it is selling some 500,000 in preferred shares via private placement to Global Kingdom Investments Ltd. at an issue price of P1,000 per share.

“The issuance is an exempt transaction under Republic Act 8799—the Revised Securities Regulation Code,” the company said in its disclosure.

The said preferred shares will come from the increase of the authorized capital stock of Chelsea to P3.5 billion, divided into 3.49 billion shares from the previous P2 billion.

Of the said increase, Udenna Corp., Uy's holding firm, will subscribe to some 375 million common shares at P3.26 apiece.

Trading of Chelsea shares was halted for one hour on Monday as a result of the transaction. It closed at P3.65 per share, down P0.01 from the previous trade.

“The proceeds from the above transactions shall be used to finance current and future projects of the company and also for additional working capital,” the company said in its disclosure.

Chelsea reported a loss of P345.08 million for the first three months of the year, a reversal of the P138.71 million in income it recorded last year.

Revenues were flat at P1.61 billion from last year's P1.59 billion, despite being the first quarter as the start of the traditional peak season for both passage and cargo business.

Its shipping business revenue was also flat at P1.5 billion, from last year's P1.48 billion despite the increase in passage revenues as the logistics operations posted a 10-percent decline due to the restricted movement of goods caused by the Taal Volcano eruption and the government-imposed lockdown.

“In the pipeline we have investments which are expected to generate significant cashflows: there are two vessels to be delivered this year, our 2.5-hectare logistics warehouse will be completed by the first quarter of next year and will boost capacity," Chelsea President and CEO Chryss Alfonsus V. Damuy said.

“We will also be soon seeing infrastructure seaport and airport modernization projects in Davao that will make meaningful contributions in the future and generate additional revenue streams. All these are vital to the Philippine economy and will remain necessary for a long time.”

Global Kingdom Investments is located in Happy Valley, Hong Kong and is part of the real estate industry.