At present, 2GO Inc. is the Philippines’ largest company for passenger and cargo transport and logistics services. It got that way thanks to its 2010 merger, as Negros Navigation, with the Aboitiz Transport System which had earlier merged its SuperFerry with Cebu Ferries and SuperCat. For a time, its top 3 shareholders have been KGLI-NM Holdings, SM Investments, and the China-ASEAN Investment Cooperation Fund. Due to the COVID crisis tanking passenger travel and shipping, 2GO Inc. has been taking some significant losses. To weather the storm a major stakeholder, Chelsea Logistics and Infrastructure Holdings under Davao businessman Dennis Uy, is passing its stake to SMIC.
The Manila Bulletin reports that SM Investments Corp. (SMIC) is acquiring Dennis Uy’s Chelsea Logistics’ 31.73 percentage stake in 2GO Inc., gaining control of the country’s largest shipping company. This was disclosed on Friday, March 19, to the Philippine Stock Exchange by SMIC, of which the board of directors has approved acquiring the shares for 2GO from Chelsea, which held 781.24 million shares valued at P8.50 per share. SM Investments thus enters the logistics services field even as Uy downsizes his own logistics arm, part of the larger Udenna Group.
KGLI-NM Holdings, a 90-percent owned subsidiary of Chelsea Logistics, will facilitate the sale of 2GO shares to SMIC, a process that is said to take up to three months. This action will thus prevent Chelsea from being further affected by 2GO’s losses, as proceeds of the sale will then go towards paying the initial loan undertaken to acquire the shares to begin with. A separate disclosure by Chelsea president and CEO Alfonsus Damuy notes, “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’s net loss in 2020 was P2.6 billion, far more than the P20-million profit it made in 2019.
Dennis Uy had in early 2020 come under fire in social media when it was discovered that some ships of the 2GO Group were being rented by the government to serve as floating quarantine facilities for P35 million. Uy therefore announced that 2GO will not accept any government payment via the Department of Transportation (DOTr), which in turn noted that the media treated Uy unfairly.
Image courtesy of Rappler