CHELSEA Logistics Holdings Corp. (CLC) on Wednesday said the Philippine Competition Commission (PCC) has cleared its proposed acquisition of Trans-Asia Shipping Lines, Inc.
In a disclosure to the stock exchange, CLC said it received the PCC decision saying it will “not take further action (on the transaction)… on the basis of the conditions provided in the Undertaking submitted by the Company.”
As part of the conditions, CLC agreed to have the PCC monitor the passenger and cargo rates, as well as explain “extraordinary rate increases” in critical routes.
The listed firm will also submit semi-annual reports on passenger and cargo trips in critical routes, and maintain service quality in passenger and cargo services using a customer satisfaction index developed by third party monitor.
Last October, the PCC started a Phase 1 review of the 2016 deal between CLC and Trans-Asia after initially voiding it on the grounds of their failure to notify the competition watchdog.
The nullification of the deal resulted to the PCC’s approval of CLC’s acquisition of a stake in KGLI-NM Holdings, Inc., which owns 2GO Group, Inc. The PCC had earlier said the Trans-Asia transaction initially raised competition concerns, as both 2GO and Trans-Asia were owned by businessman Dennis A. Uy’s Udenna Corp.
At the same time, CLC said it will no longer proceed with the offering of three million preferred shares with an oversubscription offer of up to two million preferred shares after “careful consideration” of its business strategies.
CLC said it has withdrawn its listing application for the share offer.
The application was filed with the Securities and Exchange Commission last September. In its filing, CLC said then it would sell the five million preferred shares at P1,000 each, to fund its expansion and acquisitions.
In the nine-month period, CLC saw a 72% decline in its net income to P43.013 million. — Denise A. Valdez