Chelsea Logistics prepares for IPO

Dennis Uy

Businessman Dennis Uy is combining all of his logistics assets under Chelsea Logistics Corp., ahead of the company’s initial public offering, which can raise up to P8 billion in the middle of 2017.
This comes as Uy said he was laying the groundwork for Chelsea to become a “super shipping and logistics company.”
He said Chelsea, which had announced plans to sell shares to the public for the first time in July this year, wanted to become a leading industry player “at the soonest possible time.”

Uy’s group announced yesterday that Chelsea would acquire about a third of logistics giant 2GO Group Inc., which only recently welcomed the entry of Uy’s Udenna Corp. and Henry Sy’s SM Investments Corp.

That deal would be backed by a $220-million bridge loan from Bank of China Ltd.

The agreement was signed yesterday. This forms part of a $3-billion financing package that the bank committed during President Duterte’s China state visit in October last year.

“You really need shipping,” Uy, owner and CEO of Phoenix Petroleum, told reporters after the loan signing ceremony. Uy’s Udenna has a 28 percent beneficial interest in 2GO, which had a market value of P43.3 billion on Thursday.

He said his group was also willing to acquire a larger stake in 2GO should an opportunity emerge.

Uy shares control of 2GO with the SM Group, which is also expanding its logistics business alongside other conglomerates, including Ayala Corp. and Metro Pacific Investments Corp.

“As our population grows, and not everyone can afford to fly, there will still be a lot of routes that need inter-island shipping. That’s a growth area also, especially cargo,” Uy said.

Chelsea was established in 2016 to support the operations of Phoenix Petroleum.

In line with its IPO, Chelsea was also setting aside funds to acquire other companies and buy new equipment and ships.

Uy said Chelsea would also “right-size” and modernize its existing fleet.

Chelsea has 34 vessels, composed of 11 tankers, four barges, three cargo boats, six tugboats, and 10 roll-on/roll-off vessels.

Its tanker fleet accounts for 14 percent of the industry’s gross registered tonnage (GRT), according to briefing materials shared by Chelsea. It is a much smaller player in cargo capacity, with just 2 percent of GRT.

The company posted P2.9 billion in revenue last year, up 16.7 percent from P2.49 billion in 2015.