Chelsea sells 2GO stake to SMIC

MANILA, Philippines — Chelsea Logistics and Infrastructure Holdings Corp. of Davao-based businessman Dennis Uy is selling its entire stake in 2GO Group Inc. to the Sy family for P6.6 billion in an effort to spare the company from the losses of its logistics affiliate.

Chelsea, the Udenna Group’s shipping and logistics subsidiary, said yesterday that it has signed an agreement to sell its entire stake of around 31.73 percent in 2GO to SM Investments Corp. (SMIC) at P8.50 per share.

Dennis Uy’s sale of his stake in 2GO Group Inc. to SMIC ends the partnership which started in 2017 following years of losses and a difficult shipping and logistics environment.

SMIC, one of the leading conglomerates in the country with investments in retail, property, commercial, tourism and banking, entered 2GO in 2017 with its acquisition of a minority stake in Negros Navigation Co.

SMIC, in a separate disclosure, said its board of directors has approved the acquisition, making 2GO a subsidiary of the company.

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

2GO, an integrated logistics and transportation provider, reported a P1.04 billion net loss in the nine months ending September last year, while Chelsea incurred a net loss of P2.60 billion in the same period  as revenues of both firms plunged because of weak economic activity brought about by  the pandemic.

Chelsea incurred a net loss of P367.16 million from its 2GO stake during the nine-month period.

Chelsea said proceeds of the sale, the conditions of which are expected to be completed within the next three months, would be used to pay down the loan  it obtained for the acquisition of the shares.

“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,” Damuy said.

SMIC’s current shareholding in 2GO will increase from 30.49 percent “to at least a majority of the outstanding voting capital stock of 2GO.”

SMIC is set to conduct  a mandatory tender offer to all remaining stockholders of 2GO, also at an offer price of P8.50 per share.

The company said it would file its tender offer report containing the terms and conditions and other relevant materials  with the Securities and Exchange Commission on or before March 22.

2GO, formerly owned by the Aboitiz Group, was previously Aboitiz Transport System Corp. before the entry of the Tagud family.

Dennis Uy gained entry to the 2GO Group in 2017 after months of legal battle with the Tagud family.

The 2GO Group offers multimodal transportation, warehousing and inventory management, distribution, special containers, and project logistics as well as e-commerce logistics, including last-mile deliveries, and express courier deliveries.

It has five business units composed of 2GO Sea Solutions, 2GO Special Containers, 2GO Logistics, 2GO Distribution, and 2GO Express.  — Iris Gonzales