2GO thwarts entry of Phoenix Petroleum CEO; latter goes to court for damages

A squabble over the ownership of logistics giant 2GO Group Inc. escalated Friday after Phoenix Petroleum CEO Dennis Uy, via a private holding firm, filed a legal suit in a Manila court seeking to be recognized as a shareholder.

The development emerged after 2GO’s management held a press conference Friday morning, denying that Uy-led Udenna Investments recently acquired a significant minority stake in 2GO, the country’s largest end-to-end logistics provider.

For not notifying management, 2GO’s lawyers said Udenna failed to follow proper procedures to be recognized as a shareholder.

2GO’s officers, led by chief financial officer Jeremias Cruzabra, also signaled during the briefing they were open to negotiations with other interested investors.

Throughout the briefing, however, officials said there was no intention to block the entry of Uy.

“I’m sure there is no hostility to any investment by Mr. Uy,” 2GO’s external counsel Lorna Patajo-Kapunan told reporters, adding that 2GO president and CEO Sulficio Tagud Jr. and Uy had a “friendship that goes way back.”

In a statement, however, Udenna said it was suing the Tagud family’s Negros Holdings Management Corp. for blocking its entry. It said a case was filed before a Manila trial court, where it sought to stop Negros Holdings from enforcing its decision while also seeking for damages.

“The complaint just seeks to enforce the right of Udenna Investments as shareholder,” Udenna said in its statement.

Udenna said it has indirectly acquired a 21 percent voting interest and 28 percent beneficial interest in 2GO, a listed company with a market value of about P18.7 billion.

Udenna’s entry was not in 2GO itself, but through one of its major shareholders, KGL Investments B.V., which is registered overseas and controls two of nine board seats in 2GO.

The layers of ownership are explained below:

KGL Investments—which Udenna said it acquired—and Negros Holdings are joint owners of a company called KGLI-NM Holdings Inc., which in turn controls 60 percent of the voting shares of Negros Navigation Co.

Negros Navigation Co., partly owned by another foreign investment fund,  China Asean Marine, B.V., is the main shareholder of 2GO, owning 88.3 percent. The remaining 11.7 percent of 2GO is held by the public.

In its legal filing, Udenna also asked the court to “enjoin Negros Holdings Management Corporation/ KGLI-NM from excluding Udenna Investments in participating in such management.”

2GO management, meanwhile, said the company was still luring plenty of interest from investors.

At stake was a big slice in one of the country’s most successful logistics companies, whose shareholders weathered the Asian financial crisis and a court-ordered rehabilitation.

2GO, formerly known as Aboitiz Transport System Corp. before the entry of the Tagud family, was projected to produce a record P20 billion in revenues this year, Cruzabra said.

The firm controls more than 92 percent of the country’s passenger freight and 35 percent of cargo. Those deliver close to half of revenues. It is also involved in logistics and value-added services.