CHELSEA Logistics Holdings Corp., a shipping firm of Davao businessman Dennis A. Uy has slashed the price of its initial public offering (IPO) by close to a third.
The company said it is selling its 546.59 million of primary shares at P10.68 per share, down by 27 percent from initial announcement of P14.63 apiece. Its total proceeds is now down to P5.8 billion, from P8 billion in gross proceeds.
“At such price, the book will be sufficiently covered, and the shares of Chelsea Logistics will have a lot of room for upside in the equities market,” BDO Capital and Investment Corp. president Eduardo V. Francisco said.
“The shipping and logistics industry plays a vital role in boosting trade and commerce within the Philippines and among countries,” Francisco added. “That makes Chelsea Logistics a sound and fulfilling investment.”
After the IPO, the company’s public float will result to about 30 percent.
Net proceeds of the IPO will be earmarked for fleet expansion, purchase, upgrade of ports, port facilities, containers, machineries and equipment, acquisition of other shipping and logistics firms and general corporate purposes.
Aside from expanding organically, it looks to create synergies with 2Go Group Inc., as the Davao businessman now becomes one of the top players in the shipping industry in just a span of less than a decade.
Chelsea is the holding company for the Udenna Group’s operations and investments in the shipping and logistics industry, including its substantial stake in integrated transportation-solutions provider 2GO Group.
Udenna started the shipping business in 2006 through Chelsea Shipping Corp., but mainly to support the operations of Uy’s oil firm Phoenix Petroleum Philippines Inc.
Chelsea claims to have the largest tanker fleet in terms of capacity, with a total 39,271 in gross registered tons.
In a statement approving Chelsea’s IPO, Philippine Stock Exchange Inc. President and CEO Ramon S. Monzon was quoted as saying “the general economic and market conditions provide a favorable backdrop for capital raising”.
“We are optimistic that more companies will tap the stock market for their fund-raising requirements in the coming months,” Monzon added.
The offer period of Chelsea is scheduled from July 24 to July 31, while its tentative listing date is on August 8.
With PNA