Uy’s Chelsea Logistics and Infrastructure Holdings has nosedived 76 percent since its initial public offering (IPO) in August 2017 when it raised P5.8 billion.
(The Philippine Stock Exchange approved Chelsea’s IPO despite being formed a month after Duterte took office in July 2016. PSE normally requires companies to have a three-year track record of profitability before listing. But Chelsea argued that it was folding in long-operating assets of Uy’s Udenna in the new holding company.)
Uy’s holding firm is so far the second-worst IPO under the Duterte administration next only to Cemex Holdings (down 88 percent) and ahead of Pilipinas Shell (down 73 percent), both multinational corporations.
While Uy expanded his empire from fuel and shipping to include property development, hotel-casino, restaurant, school, fastfood, retail, telecoms, Ferrari dealership, and energy under Duterte, his holding firm has been racking up hefty losses and debt at the same time.
After posting profits of P161.2 million in 2017, Chelsea has piled up losses every year since its IPO: P551 million losses in 2018, P832 million losses in 2019, and P3.31 billion losses in 2020.
In 2016, Chelsea had only P5.654 billion in loans with the bulk owed to China Banking Corp. (P2.239 billion), BDO Unibank (P1.321 billion), CTBC (P700 million), and Philippine Business Bank (P698 million).
In 2020, Chelsea’s loans had ballooned to P14.854 billion with the bulk owed to Development Bank of the Philippines (P4 billion), ChinaBank (P3.454 billion), and Philippine Business Bank (P2 billion).
Chelsea was in danger of defaulting on its loans if not for the debt moratorium provisions granted under two Bayanihan laws approved by Duterte to save distressed firms from the pandemic.
For its loans with the state-run bank, Chelsea “availed of the ‘DBP RESPONSE (Rehabilitation Support On Severe Events)’ program, wherein the borrower may defer its loan repayment of up to six months with the option for restructuring in case the borrower is not able to recover within six months.”
Uy has yet to announce if his creditors have agreed to a restructuring plan.
Since its IPO, Chelsea made three major acquisitions:
* Purchase through shares swap of Udenna’s 80 percent in KGLI-NM, which in turn owned 40 percent economic interest in Negros Navigation Co., Inc. (Nenaco), the parent company of 2Go Group
* Consolidation of Starlite Ferries Inc. (owned by the family of Energy Secretary Al Cusi) into Chelsea in September 2017. The purchase of Starlite, which had just borrowed from DBP and PBB in 2016 to buy new boats, increased Chelsea’s loans by 40 percent to P10.332 billion as of end-2017.
* Chelsea subscribed to 25 percent of Dito Telecommunity Corp.s’ 25 percent stock in June 2019 or less than a year after Uy won the bidding for the third telco franchise in November 2018.
The post Sinking since listing: Dennis Uy’s Chelsea is 2nd worst IPO under Duterte with debt tripling, losses mounting since market debut first appeared on Bilyonaryo Business News.
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