Davao businessman Dennis Uy is big news nowadays, thanks to his aggressive stance in business, especially when it comes to the local merger-and-acquisition scheme.
From taking over transport firm 2GO to bringing his own Chelsea Logistics public recently, to bringing his flagship Phoenix Petroleum into a tighter embrace with the SM group, the entrepreneur-turned-tycoon is making waves and getting noticed.
But perhaps nowhere more so than in the world of finance where everyone is eager to be the friend of “DAU” (his initials).
When a bank wants to be one’s friend, they express it by throwing money one’s way, usually in the form of a credit line. In the case of Uy, everyone already knows how he masterfully used leverage to acquire 2GO and set up Chelsea Logistics (through the help of lenders from China).
Now even local banks are joining the action. Word on the street is that the businessman recently got another $300-million credit line from the Sy-owned BDO Unibank while simultaneously getting a similar $300-million loan facility from his old creditor, Bank of China. Not to be left out, Lucio Tan-controlled Philippine National Bank also extended another $300-million facility to the businessman. According to our source, PNB has even expressed willingness to come in as an equity partner to the tune of $100 million in Uy’s next acquisition.
And what might that be? The buzz is that the businessman is looking at the acquisition of the Kuwaiti development in Clark, Pampanga, that was meant to be a logistics hub. If this proves to be correct, the acquisition will dovetail perfectly into Uy’s thrust of being an even bigger player in the logistics scene, notwithstanding his already formidable presence in the shipping business.
The rumored acquisition price for the development that was started a few years ago as the Global Gateway Logistics City is a cool $1 billion, which would be a bargain given that this project was pegged at a full value of $3 billion (at full potential) when it was launched.
Incidentally, the $1-billion value of this project squares perfectly with the total credit lines the banks extended to Uy as listed above. Also incidentally (or maybe not) is that fact that this Clark development is owned by Kuwait’s KGL Investments — the very same firm Uy bought out of 2GO when he took over the firm earlier this year.
Biz Buzz asked Uy about this rumor and he denied it, adding cryptically that he does not yet have the capital to make the debt-laden purchase happen. But knowing how popular he is nowadays, would his lenders even mind? Maybe. Maybe not. Or maybe not yet. —DAXIM L. LUCAS
Citi office buyer
It’s not often that office property space comes up for sale in Makati central business district where there’s little space to build anything new. But with American banking giant Citibank set to move its headquarters to a new office building in BGC later this year, some office space is opening up for the big boys who are looking to buy additional work space.
The latest buzz is the country’s biggest lender, BDO Unibank, is in talks to acquire some office space to be vacated by Citi along Paseo de Roxas. Although BDO has a brand-new skyscraper in Ortigas and is building another one in that area—and owns a number of skyscrapers in Makati not too far from the current Citi head office (last year, it also bought Shell House just behind Citi), the SM-led bank needs more office space for internal use. “We are hoping to just buy a few floors for our expansion of work space,” a BDO source said.
Three years ago, BDO also bought the thrift bank unit of Citi, which it renamed Banco de Oro Savings Bank.
But while Citi’s Philippine head office will transfer to Citi Plaza located on 34th St. in BGC, it has announced that branch banking will remain at the Paseo de Roxas office. —DORIS DUMLAO-ABADILLA
A week after Uber’s suspension
A week has passed since Uber Philippines was suspended by the Land Transportation Franchising and Regulatory Board (LTFRB)— a hefty penalty that likely hurt the commuting public as much, if not more, than the violating entity.
Uber, no doubt, is preparing for a hearing today on its appeal to convert the suspension (originally to last a whole month) to a monetary fine. (Details will be threshed out at that meeting, including monetary support to be paid to its drivers affected by the suspension. Some drivers are wondering, in fact, whether they would receive support if they switched over to Grab, for example).
In any case, it’s good to take stock of how much life has changed since Uber’s temporary deactivation. No, the world did not end and many of Metro Manila’s commuters somehow reached their desired destinations.
Uber’s short absence has revealed a few truths about getting around our capital district by car.
For one, ridesharing companies are correct in pointing out that demand has far outstripped supply. You can tell by the difficulty in booking a Grab car, for example.
Following the same supply-demand rules that govern ridesharing’s surge pricing mechanics, more available vehicles keep prices down. We heard that hasn’t been the case this past week.
There are likely several reasons for that. The simplest of which is that ridesharing has truly changed the way people get around. Said another way, there’s a slice of the population who would never ever go back to using a regular taxi cab.
Perhaps the most important observation in this unscientific piece is how Uber’s absence has affected traffic. After all, this was one of the original theories of the government a year ago when it halted the processing of new driver applications—that ridesharing was causing much of the traffic congestion.
Has your daily drive or road trip improved? Did the bottlenecks on Edsa and other busy roads ease? Now, if it took you that long to answer… —MIGUEL R. CAMUS
Offering deferral
Biotech firm Philab Holdings Corp. has shelved for now a plan to raise as much as P2 billion in fresh funds from the capital market through the sale of up to 500 million new shares.
Philab, now led by former Pag-IBIG chief Darlene Berberabe, said it had hired a new underwriter to manage the proposed follow-on offering. It has brought onboard China Bank Capital Corp., replacing Philippine Commercial Capital Inc. The company said that as the new underwriter, China Bank Capital has requested for sufficient time to conduct due diligence on the company.
The company also realized that launching such a follow-on offering at this time might not be the best course of action. Instead, Philab said it would use the lull to consolidate its business lines and prospects.
Given this decision to defer the follow-on offer, Philab is withdrawing its listing application with the Philippine Stock Exchange, albeit the company said a possible refiling of application would be possible by 2018. —DORIS DUMLAO-ABADILLA