Davao’s Dennis Uy selling stake in 2Go

Businessman Dennis A. Uy of Davao is moving to divest his minority stake in 2Go Group Inc., exiting five years after entering the logistics giant.

A source with direct knowledge of the matter told the Inquirer that talks were ongoing and that a deal could be “soon” announced.

Uy did not immediately respond to a request for comment.

A leading and well-known brand in cargo and passenger shipping, distribution and courier services, 2Go operates in segments badly hit by the COVID-19 crisis and suffered large financial losses as of its latest regulatory filing last year.

The source, who requested anonymity, said the deal would primarily strengthen Uy’s Chelsea Logistics and Infrastructure Holdings Corp., which owns an effective 28 percent economic interest in 2Go.

“No more losses will accrue with the 2Go stake,” the source said. Uy sits as chair of both 2Go and Chelsea Logistics.

The source said proper public disclosures would be made should Uy’s exit—the subject of previous media reports—materialize.

2Go, which has a market value of P22.4 billion, reported a loss of P1.04 billion as of September last year, larger than its P923 million loss in 2019, after revenue dropped 16 percent during the pandemic.

At the same time, Chelsea Logistics recorded a net loss of P367.2 million from its 2Go stake, its latest disclosure in September showed.

Chelsea Logistics has seen financial losses balloon last year to P2.6 billion due to the pandemic-induced downturn and to cover increasing debt payments, which reached over P986 million as of the third quarter of 2020.

Takeover rumors at 2Go had previously involved the Sy family’s conglomerate, SM Investments Corp., which is the logistics giant’s other major shareholder that entered 2Go around the same time as Uy.

Through its banks, SM Investments is a major creditor of both 2Go and Chelsea Logistics. SM officials did not immediately respond to a request for comment.

A change in ownership would mark a new chapter for 2Go, which was established in the 1949 post-World War 2 era as William Lines.

The Aboitiz Group bought the company in the early 2000s and announced its exit in 2008 when it sold to Negros Navigation, which was eventually acquired by SM and Uy.

More recently, Uy announced his willingness to sell any businesses within the group in a stock market disclosure made by Phoenix Petroleum Philippines Inc. on Feb. 15.

This was after the Inquirer reported Uy was open to selling a stake in Phoenix to a possible strategic partner to improve earnings and address concerns on its debts.

Apart from energy and logistics, Uy is involved in telecommunications, property, retail convenience stores and hospitality under Udenna Corp. INQ