SMIC pays $124.5 M for 34.5% Nenaco stake

MANILA, Philippines - Sy-owned holding firm SM Investments Corp. (SMIC) acquired a minority stake in Negros Navigation Co, the parent company of the 2Go Group, for $124.5 million.

In a disclosure yesterday, SMIC said it acquired about 888.5 million preferred shares of Nenaco, or 34.5 percent of the company, for $0.14 per share.

The company acquired the shares from China-Asean Marine B.V., one of the foreign fund owners of Nenaco.

Nenaco is the majority shareholder of 2Go Group Inc., the country’s largest integrated supply chain operator whose businesses include shipping, freight forwarding, warehousing, and express delivery services.

SMIC president Harley Sy earlier said the company’s investment in a fast growing and dynamic logistics business bodes well for its growing operations.

“We are pleased with this opportunity to invest in a fast growing, dynamic logistics business. It will benefit from, as well as contribute to the country’s economic progress especially as development spreads to the provinces,” he said.

Sy said the group is optimistic about broader regional growth with the government plans in infrastructure, agriculture and tourism.

Businessman Dennis Uy and other local investors have also acquired a stake in 2Go after months of legal wrangling.

Last September, Uy’s holding company, Udenna Corp., the parent and majority stockholder of Phoenix Petroleum Philippines Inc., obtained shares from Netherlands-based KGL Investment B.V., which owns about 60 percent of KGLI-NM.

KGLI-NM controls Negros Navigation Co. or Nenaco, which owns 88.31 percent of 2Go.

SMIC is one of the leading conglomerates in the country with investments in retail, property, commercial, tourism and banking.

Aside from SMIC, other conglomerates are also looking into investing into the lucrative and less regulated logistics and e-commerce industries as part of plans to grow even bigger.

Some of the country’s biggest business companies are eyeing a stake in existing last mile player like the 2Go Group.

In industry parlance, a last mile company refers to a service provider that is able to bring goods to their final destination. This last leg of the supply chain is often the most tedious and less efficient and comprises 30 percent of the total cost to move goods.

Metro Pacific Investments Corp. (MPIC), for instance, has made its foray in logistics and invested P2.2 billion to acquire the business and assets of a group of logistics service providers including Basic Logistics Inc., a local mid-sized company.