Udenna buys 21% of 2Go shares; 2Go unaware of transaction

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Udenna Corporation, the parent and majority stockholder of Phoenix Petroleum Philippines Inc. (PPPI), has acquired a 21% share in integrated transport solutions provider 2Go Group, Inc.
Udenna Corporation, the parent and majority stockholder of Phoenix Petroleum Philippines Inc. (PPPI), has acquired a 21% share in integrated transport solutions provider 2Go Group, Inc.
Udenna Corporation, the parent of Phoenix Petroleum Philippines Inc., has acquired a 21% share in integrated transport solutions provider 2Go Group, Inc. Photo from www.phoenixfuels.ph

Holding firm Udenna Corporation, the parent and majority stockholder of Phoenix Petroleum Philippines Inc. (PPPI), has acquired a 21% share in integrated transport solutions provider 2Go Group, Inc.

Udenna obtained the shares from Netherlands-based KGL Investment B.V., which owns about 60% of KGLI-NM Holding, Inc., which in turn controls shipping firm Negros Navigation Co. Inc. (NENACO) that owns 88.31% of 2Go.

But in a disclosure to the Philippine Stock Exchange on September 13, 2Go said was “not aware of the transaction between Udenna Corp. and KGL Investment B.V.”

“At any rate, 2Go is establishing the veracity of the information and will make any necessary disclosures at the appropriate time.”

Dennis Uy, owner of Udenna, said “2Go’s growth has been constant over the last couple of years, making it an attractive long-term venture for us.”

“We believe that the acquisition is in line with Udenna’s goal of investing in related and/or allied businesses where we can contribute to further enhance its value and consequently promote our Company’s expansion,” Uy added in a statement.

2GO is the country’s largest end-to-end logistics solutions provider, with services including warehousing; inventory management; domestic and international express mail and courier services; sales distribution and merchandising; domestic freight services for full or less container load shipments; ISO tank, reefer and cold chain services; heavy lift and project logistics; regular liner passenger service; corporate and leisure travel and package tours; and international freight forwarding and brokerage.

Udenna is a diversified holding company with business interests in the distribution and retailing of petroleum products, commercial shipping, ship management, logistics, financial services, environmental services and property development.

It acquired majority shares of PPPI, one of the country’s independent oil companies, after, after PPPI’s board of directors recently approved the sale of wholly owned subsidiaries Chelsea Shipping Corp. (CSC) and Phoenix Petroterminals and Industrial Park, Corp. (PPIPC) to Udenna.

CSC and PPIPC represented about 8% of the consolidated assets of PPPI as of 2015 and together have an estimated market value of about P7 billion, the oil company disclosed to PSE.

The sale of CSC and PPIPC to Udenna will be subject to a third-party valuation and fairness opinion. The transaction has an estimated price of P3 billion to P3.5 billion (net of debt) and will generate between P500 million and 700 million in non-recurring gain for PPPI.

The oil company said the proceeds of the sale will be used to pay off its existing debts by the end of 2016. Furthermore, the reduction in interest-bearing debt will save PPPI P150 million to P160 million a year in interest expense starting 2017.

The oil firm added that the sale “will significantly allow” it to allocate all of its resources to the fueling of aggressive growth in its core business and the distribution of petroleum products nationwide.