Former shipping rivals 2GO Group Inc. and Negros Navigation Co. Inc. (Nenaco)—now under the SM-Dennis Uy alliance—are set to merge through a share-swap deal that will cement 2GO’s position as a local shipping and logistics powerhouse.
Each stockholder of Nenaco will receive 2GO common shares using the exchange or swap ratio of 0.26 2GO share for every one Nenaco share, 2GO said in a disclosure to the Philippine Stock Exchange yesterday.
The merger, which will have 2GO as the surviving entity, seeks to “simplify corporate structure and to develop efficiencies and economies within the group,” the disclosure said.
“This is in line with 2GO’s efforts to streamline operations, reduce costs, and increase shareholder value,” the disclosure added.
The enlarged 2GO will have a fleet of 26 sea vessels, consisting of eight freighters or cargo ships, eight roll-on roll-off passenger (RoPax) vessels and 10 fastcrafts. Of the freighters, five are leased and three are company-owned.
Of the combined fleet, NENACO will contribute four vessels consisting of four freighters and one RoPax vessels.
The parties intend to implement the merger within the year, subject to regulatory approval of the Securities and Exchange Commission (SEC).
The privately-held Nenaco will use its own shares as currency in exchange for 2GO shares. Nenaco shares are composed of: 3.36 billion common shares with par value of 20 centavos each; one billion series A preferred shares with par value of 20 centavos each and 1.23 billion series B preferred shares with par value of 65 centavos each.
All of Nenaco’s shares will be converted to common shares prior to the merger and will also be exchanged for 2GO common shares.
Nenaco, one of the oldest domestic shipping companies in the Philippines, currently owns 2.16 billion or 88.31 percent of 2GO’s outstanding stocks.
The merger had been approved by 2GO’s stockholders in an annual meeting held on Thursday.
2GO is itself an offshoot of the consolidation of the shipping assets of William, Gothong and Aboitiz groups in 1995. The Aboitiz bought out the stake held by the other partners in combined entity WG&A in 2002 and renamed the company Aboitiz Transport Systems. In 2010, the Aboitiz group sold the business to the rival Nenaco.
Trading on shares of 2GO was halted for one hour on the PSE from 9:20 a.m. yesterday. Its shares surged by 6.33 percent to close at P18.82 per share, giving it a market capitalization of P43.3 billion. —DORIS DUMLAO-ABADILLA