Chelsea Logistics mulls bond offering this year
CHELSEA LOGISTICS Holdings Corp. (CLC) may conduct a bond offering up to P7 billion to finance its expansion plans for the year, following the company’s withdrawal of its proposed share offering earlier this month.
CLC Vice-President for Finance Ignacia S. Braga IV said they are currently working with local debt watcher Credit Rating and Investors Services Philippines, Inc. (CRISP) to rate CLC. CRISP guides investors by rating companies based on their investment risks in the debt market.
“We are working with CRISP to do a rating of Chelsea Logistics…so that if we decide to do it under debt, under bond-raising, commercial papers, at least we will be ready,” Ms. Braga told reporters on the sidelines of ISM Communications Corp.’s special stockholders’ meeting last week
The listed logistics firm earlier planned to offer three million preferred shares, with an overallotment option of up to two million preferred shares, priced at P1,000 each, to raise up to P5 billion this year. The capital raised was meant to fund its expansion and acquisitions.
Asked if the fund-raising activity will still constitute P5 billion, Ms. Braga said it could now reach P7 billion due to additional capital expenditure requirements.
Ms. Braga noted most of the company’s capex is for a warehouse facility on a 2.5-hectare property in Taguig.
“We’re building a warehouse complex. We need about P2.5 billion to complete (the) project, but we have already acquired the property so it’s (gonna be less than that). We have already awarded the construction of the building… And to support the warehouse, you need the delivery vehicles,” Ms. Braga explained.
The Taguig warehouse will be fully leased out to local logistics solutions firm, Worklink Services, Inc.
The CLC executive said the company is also beefing up its container yards following their acquisition of Trans-Asia Shipping Lines, Inc., which operates two freighters, among others. The company currently has container yards in Davao and Manila. The expansion of the container yards entails the purchase of more terminal equipment, flat beds, and trucks.
Meanwhile, Ms. Braga said there are no allocations for infrastructure projects for this year since the company will only be conducting project feasibility studies to submit unsolicited proposals.
CLC has already received the original proponent status for four projects. This includes its P49-billion offer to develop and operate the Davao International Airport, an P11.2-billion proposal to develop and operate the Sasa Port in Davao City, a monorail system in Davao, and a light rail system in Cebu.
CLC’s net income attributable to the parent dropped 72% to P43.01 million in the first nine months of 2018, amid a 61% uptick in gross revenues to P3.69 billion during the same period. — Arra B. Francia