Chelsea inks $220-M bridge loan with Bank of China

MANILA, Philippines - Chelsea Logistics Corp. (CLC), the shipping company of businessman Dennis Uy, signed a $220-million bridge loan agreement with the Bank of China Ltd. as it works to become a “super shipping company.”

“We want to be a super shipping company that provides end-to-end services from the smallest tugs to bunker vessels. (This would) complement our logistics (business),” Uy told a press briefing yesterday.

He said Chelsea would complement 2GO, the listed logistics company he recently bought into.

“Our investment in 2GO aligns with our commitment to contributing to our economy’s growth story by facilitating more efficient trading within and outside the archipelago,” Uy said.

Uy is also the founder of Phoenix Petroleum, the listed Davao-based Phoenix Petroleum.

Bank of China granted the loan under the initial $3-billion financing package it committed, during the state visit of President Duterte to China in October last year, to help sustain the economy’s growth.

In his welcome message during the signing ceremony, Bank of China country head Deng Jun said there would be other companies that would utilize the balance under the $3 billion package, which could also include Uy’s other businesses.

“We look forward to investing more in the development of infrastructure and other strategically important industries in the Philippines to further unlock the potential of the economy,” Deng said.

CLC, the logistics arm of Uy’s holding company, Udenna Group, has earmarked proceeds from the bridge loan for its acquisition of its stake in the 2GO Group through an affiliate.

Deng said the synergies between Udenna and 2GO would bring together a stronger and more efficient shipping and logistics industry for the country.

He added through the credit facility, the Bank of China is able to contribute in the Philippine economy’s growth.

“Efficient shipping and logistics are a key component to creating a globally competitive economy,” Deng said.

CLC acquired the outstanding capital stock of Udenna Investments B.V. (UIBV) in March 2017. UIBV has economic interests in KGLI-NM Holdings Inc., which in turn has direct ownership of Negros Navigation Co. Inc. — the controlling shareholder in 2GO.

The company, which is also targeting to list in the stock market next month, continues to expand organically and through other acquisitions to become the prime mover of goods and passengers in the Philippines. It looks to raise P8 billion from an initial public offering of shares.