Uy’s Chelsea Logistics gets $220M loan from China

Dennis Uy

MANILA — Businessman Dennis Uy’s Chelsea Logistics Corp. signed on Thursday a $220 million (P10.9 billion) loan deal with the Bank of China Ltd., part of Uy’s broader goal to become a major player in the Philippines’s fragmented logistics sector.

In a statement, Chelsea said proceeds from the loan would be used to acquire a “substantial stake” in 2GO Group Inc., a company controlled by the SM Group and Uy, best known as the owner and CEO of Phoenix Petroleum.

The objective is to consolidate Uy’s logistics assets under Chelsea, which in turn is planning an up to P8 billion initial public offering, expected around July this year.

Uy, through his holding company Udenna Corp., controls a 28-percent beneficial interest in 2GO, which has a market value of around P43 billion.

Chelsea said on Thursday the $220 million funding was a bridge loan agreement. It was part of a $3-billion financing package that China committed during the state visit of President Duterte last October.

“Our investment in 2GO aligns with our commitment to contributing to our economy’s growth story by facilitating more efficient trading within and outside the archipelago,” Uy said in a statement.

Chelsea currently has 34 vessels, comprised of 11 tankers, four barges, three cargo boats, six tugboats, and 10 roll-on/roll-off vessels. Its tanker fleet accounts for 18 percent of the industry’s gross registered tonnage.

The company posted P2.9 billion in revenues in 2016, up 16.7 percent from P2.49 billion in 2015.  SFM