Chelsea aims to be a nautical powerhouse

Dennis Uy

Shipping firm Chelsea Logistics Corp. (CLC) debuted on the Philippine Stock Exchange on Tuesday with aspiration to be a nautical powerhouse, an industry consolidator and an investor in port and other logistics facilities supporting its core business.

Shares of CLC, taken up mostly by retail investors, hit as high as P11.22 per share but closed at P10.58 per share during its inaugural trading on Tuesday, 1.12 percent lower than its initial public offering price of P10.68 per share. This tracked the reversal in the local stock market, which breached 8,000 in morning trade but closed flat for the day.

The Davao-based logistics company raised P5.84 billion from the IPO, which was oversubscribed by three times the base offer.

“The PSE is proud to provide a venue for Chelsea Logistics to realize its growth strategy as it utilizes funds raised from the IPO for its acquisition and expansion plans,“ PSE chair Jose Pardo said in his welcome remarks during the ceremony. “On a bigger scale, Chelsea’s initiatives bode well for the logistics and transport sector especially as maritime trade is expected to be among the country’s growth drivers.”

In a press briefing after the listing ceremonies, Uy said Chelsea would look at opportunities to invest in port facilities, the company being a major user of ports.

“We’re looking around if there are a lot of gaps. Some of the (port) expansion will be carried by government through ODA (official development assistance) programs so if we have a chance to be part of PPPs (public private partnership), we will look at opportunities,” he said.

Acquiring other companies is likewise part of the game plan, with P3.2 billion of IPO proceeds earmarked for the acquisition of other shipping and logistics companies. “We hope we can be a catalyst that can consolidate or at least modernize and refleet,” he said.

CLC sold 546.59 million new common shares to the public, mostly domestic investors. Less than 1 percent was taken up by foreign investors.

“The role of the shipping and logistics industry in sustaining and driving the growth of the economy of an archipelago like the Philippines is, to say the least, crucial,” Uy said.

“Moving agricultural products, construction materials, petroleum and other vital goods as well as large numbers of people from one island to another requires a robust, efficient and reliable shipping industry.”

Out of the IPO proceeds, CLC also earmarked about P1.78 billion for fleet expansion, including the acquisition of a medium-range tanker that can carry 45 million to 55 million liters of bunker fuel across international waters.

The company, meanwhile, set aside P245 million for the acquisition and/or upgrade of ports, port facilities, containers, machineries and equipment to support its core business.

CLC is also aspiring to eventually become a regional player by expanding organically and creating synergies with 2GO Group Inc. and affiliates within the Udenna Group.

Udenna started the shipping business in 2006 through Chelsea Shipping Corp. (CSC) to support the operations of the country’s leading independent and fastest-growing oil company, Phoenix Petroleum Philippines, Inc.

The business has since grown into the country’s largest shipping group. It has the largest tanker fleet in terms of capacity with a total 39,271.64 gross registered tonnage. In March, CLC acquired a 28.15 percent indirect economic interest in 2GO Group and subsequently took over its management.