Chelsea avails of loan payments extension

MANILA, Philippines — Chelsea Logistics and Infrastructure Holdings Corp., the  shipping and logistics business of Davao-based tycoon Dennis Uy, has availed of loan payments extension provided under Bayanihan Acts 1 and 2 to ease its cash flow as it sees a long recovery ahead amid the negative impact of the COVID-19 pandemic.

In its special stockholders’ meeting Tuesday, company officials said Chelsea is implementing measures to navigate through the challenging environment.

These include the availment of the extension periods for loan payments provided under Bayanihan Acts 1 and 2 to ease its cash flow, deferment of bulk of its capital expenditures except for those already committed and started, disposal of idle and inefficient assets, and the implementation of a workforce rationalization program.

Bayanihan 1 provides a 30-day loan moratorium for loan payments falling due during the quarantine periods while Bayanihan 2 provides for a 60-day loan payment moratorium.

Chelsea did not indicate the amount of loans to be covered by the payment deferments but according to its latest annual report, its interest-bearing loans and borrowings increased by 13 percent to P16 billion as of end-2019 from P15.6 billion in 2018.

This was due to availment of new loans related to the acquisition of vessels in relation to the group’s continued expansion programs.

Chelsea posted a net loss of P1.3 billion in the first half of 2020 from a net income of P308.6 million a year ago.

With the aforementioned measures, Chelsea Logistics president and CEO Chryss Alfonsus Damuy said the company is now in the best position to bounce back faster once the economy improves and businesses operate in the new normal.

Chelsea increased its authorized capital stock from P2 billion to P3.5 billion, divided into 3.49 billion common shares and 10 million preferred shares, both with a par value of P1 per share.

“This increase will give the company greater flexibility and optionality for any equity raising to finance current and future projects as well as for additional working capital needs,” Damuy said.

Despite the challenging situation in the shipping industry, the company also has a growing logistics business that has been benefiting from the surge in e-commerce and demand from advanced mobile applications and banking solutions, he added.

One of the company’s investments expected to be a significant cash flow generator is its 2.5-hectare logistics warehouse which will be completed by the first quarter of 2021.

As the company sees signs of recovery in its shipping business in 2021, positive cash flow is seen in early to mid-2022.