CHELSEA Logistics Holdings Corp. (CLC) plans to convert some of its common shares into preferred shares in order to support its capital spending for 2018.
In a disclosure to the stock exchange on Wednesday, the Dennis A. Uy-led company said the funds raised from the planned equity conversion will finance its acquisition of vessels, mergers and acquisitions, as well as the expansion of its shipping, transportation, and logistics projects.
“Aligned with its shipping business, there are a number of business opportunities being presented to the Company for the operation of airports and ports, and also facilities which can be utilized in connection with its logistics business. The creation of Preferred Shares will generate additional funds for the Corporation to utilize for these business opportunities,” the company said.
CLC has yet to disclose how many shares will be converted and the target amount to be raised. The equity conversion will come from the company’s authorized capital stock of P2 billion.
CLC was able to accelerate its expansion after raising P5.8 billion during its initial public offering at the Philippine Stock Exchange in August last year. This allowed the company to acquire several logistics companies to improve its network, including a 28.15% indirect economic stake in 2GO Group, Inc., 100% of Starlite Ferries, Inc., and WorkLinkServices, Inc.
The new acquisitions brought in an additional P1.3 billion in freight revenues, P800 million in passage revenues, and P200 million from logistics services for its 2017 performance.
Earnings of CLC accordingly grew 17.5% to P161 million in 2017, after revenues jumped 140% to P3.9 billion. The company expects to see increased contributions from its acquisitions this year.
Earlier this week, CLC has secured approval from its shareholders to amend its articles of incorporation to reflect its intention to venture into infrastructure facilities and systems.
“The expanded primary purpose will also enable the Company to expand from its current transportation businesses to other utility businesses including, but not limited to, telecommunication, power and other related utilities,” the company said in a separate disclosure on Tuesday.
In February, CLC submitted to the government a P67-billion unsolicited proposal to develop the Davao and New Bohol (Panglao) airports.
Shares in CLC gained 18 centavos or 2.46% to close at P7.50 each at the stock exchange on Wednesday. — Arra B. Francia
