Tuesday, December 7, 2021
HomeBreaking NewsChelsea Logistics sells total 2GO stake to SM group

Chelsea Logistics sells total 2GO stake to SM group

  • Chelsea Logistics and Infrastructure Holdings Corp. (CLC) sold its entire stake of 31.73% in affiliate 2GO Group, Inc. to SM Investments Corp. (SMIC)
  • With the divestment, CLC said it will not be impacted by 2GO’s losses, which will aid CLC’s recovery from the COVID-19 pandemic
  • The sale will be at P8.50 per share and done through CLC’s 90%-owned subsidiary KGLI-NM Holdings Inc.
  • SMIC’s current shareholding in 2GO will rise from 30.49% to at least a majority of the outstanding voting capital stock, making the logistics company an SMIC subsidiary

Chelsea Logistics and Infrastructure Holdings Corp. (CLC) has signed agreements to sell its entire stake of around 31.73% in affiliate 2GO Group, Inc. to SM Investments Corp. (SMIC).

In a statement, CLC said the sale will be at P8.50 per share and will be done through its 90%-owned subsidiary KGLI-NM Holdings Inc. Sale proceeds will be used to pay the loan obtained to acquire the shares.

CLC said it will complete the sale conditions within the next three months.

“With the divestment, Chelsea will not be impacted by 2GO losses, which will aid the company in recovering from the current COVID-19 pandemic,” CLC president and chief executive officer Chryss Alfonsus Damuy said.

“With our numerous group-wide initiatives currently being undertaken, we are confident that Chelsea will be best prepared and positioned to take advantage of the recovery of the industry as we move forward,” he added.

2GO incurred a net loss of P1.04 billion in the first nine months of 2020, 7% higher than the P972-million loss it recorded in the same period of the preceding year. CLC also logged a net loss of P2.602 billion in the first nine months of 2020, a reversal from the P19.951-million net profit in the same period of 2019.

In a regulatory disclosure, SMIC said its board met on March 18 and approved the acquisition of 2GO’s common shares. This will increase SMIC’s current shareholding in 2GO from 30.49% to at least a majority of the outstanding voting capital stock of the logistics company, making 2GO a subsidiary of SMIC.

In compliance with the Securities Regulation Code and its implementing rules and regulations, the Board of Directors of SMIC likewise authorized the conduct of a mandatory tender offer to all remaining stockholders of 2GO, also at an offer price of P8.50 per share.

SMIC will be filing its tender offer report with the Securities and Exchange Commission by March 22, 2021.

In September 2016, CLC’s parent firm Udenna Corp. obtained 21% of the shares of Netherlands-based KGL Investment B.V., which owned about 60% of KGLI-NM. KGLI-NM Holding, Inc. controlled shipping firm Negros Navigation Co. Inc. (NN), which owned 88.31% of 2GO.

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

In 2017, CLC acquired a 28.15% indirect economic interest in 2GO. In the same year, SMIC also acquired shares in 2GO from NN. In 2019, NN was merged with 2GO, with 2GO as the surviving entity.

READ: SM Investment enters logistics through 34.5% stake in 2GO

2GO and its subsidiaries provide shipping, logistics and distribution services to small and medium enterprises, large corporations, and government agencies throughout the Philippines.

Its shipping group operates ocean-going freighters, roll-on/roll-off (Ro-Ro) freight and passenger vessels, and fast ferry passenger vessels.

The logistics group offers transportation, warehousing and distribution, cold chain solutions, domestic and international ocean and air forwarding services, customs brokerage, project logistics, and express and last-mile package and e-commerce delivery.

As of 2019, 2GO and its subsidiaries have a total fleet of 27 operating vessels, consisting of six fast craft and five Ro-Ro/passenger vessels.

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