By Arra B. Francia

BUSINESSMAN Dennis A. Uy’s Chelsea Logistics Holding, Inc. is a step closer to listing its shares on the Philippine Stock Exchange, after the country’s corporate regulator approved on Tuesday its application for an P8-billion initial public offer.

In a text message to reporters, Securities and Exchange Commission Officer-in-Charge for the Office of Commission Secretary Armando A. Pan, Jr. confirmed the approval of Chelsea’s maiden offer.

The logistics arm of Mr. Uy’s Udenna Corp. will be listing a total of 1.82 billion common shares, composed of 546.59 million common shares and 1.272 billion issued and outstanding common shares priced at a maximum price of P14.63 apiece.

The offer period was originally slated for June 21-27, with listing initially targeted for July 5.

Chelsea’s IPO still needs the green light from the Philippine Stock Exchange.

Once listed, the company will be traded under the ticker “CLC.” The net proceeds of the offer will be used to finance the expansion of its cargo and passenger shipping businesses organically and through acquisitions. Chelsea will be the second company under the Udenna group to go public after Davao-based oil firm Phoenix Petroleum Philippines, Inc., which celebrated its 10th listing anniversary on Tuesday. To mark the milestone, President Rodrigo R. Duterte led the ceremonial bell ringing to close the trading day at the PSE, albeit two hours later than the actual closing.

Chelsea has two units in the shipping business, namely Chelsea Shipping Corp. which engages in maritime conveyance or carriage of petroleum products, goods, wares, and merchandise in the Philippines, and Trans-Asia Shipping Lines, which transports passengers and cargo both within Philippine territorial waters and/or in the high seas.

Summit Securities President Harry G. Liu said that the investing public has been keeping a close eye on Chelsea even if it has not been listed yet because of the positive outlook on the logistics sector.

“It’s very much being anticipated by the investing public that it’s a good issue to consider. Everybody seems to be talking about it at this stage even though it’s not yet out in the market,” Mr. Liu said in a phone interview.

SPOTLIGHT ON 2GO
Chelsea also has a stake in Negros Navigation Co., Inc. (Nenaco), the firm with the largest stake in 2GO Group, Inc. 2GO has been put on the spotlight this week after the new management, which includes the Udenna group and Henry Sy, Sr.’s SM group, released the results of a special audit on the shipping company’s financial statements for fiscal years 2015 and 2016, and the quarter ending March 31, 2017.

The new audit performed by SyCip, Gorres, and Velayo Co. revealed that 2GO’s actual profits in 2015 and 2016 were lower than the P1 billion it previously disclosed for both periods.

2GO restated its 2015 net income to P105.13 million, almost 90% lower than the P1.08 billion it previously reported. Meanwhile, its restated 2016 profits stood at P344.03 million, 74% lower than the P1.35 billion the company initially disclosed.

Despite this, Chelsea said in a statement that it continues to hold rosy prospects for 2GO, noting that the restated items were non-cash and non-recurring. “Thus, the prospective profitability of 2GO remains strong,” the company said.

“We’re very bullish (on Chelsea), it’s just that we’re a bit cautious with the recent issue with 2GO, because 2GO is a significant part of Chelsea,” Aristotle D. Reyes, Jr., equity trader of UPCC Securities Corp. said in a phone interview.

Mr. Reyes, however, explained that while shares in 2GO may affect trading in the next two days, the setback is only temporary.

“There’s a new management and we are very bullish also with what’s happened. It means that the new management is committed to good governance, good management with 2GO,” he added.

The trading suspension on 2GO shares, which started on Monday, will be lifted on Wednesday at 10 a.m.

LBC EXPRESS Holdings, Inc. is reviving its planned follow-on offering, which was earlier thumbed down by the Securities and Exchange Commission (SEC) due to pending cases facing the company’s owners.

“On July 10, the Board of Directors of LBC resolved to approve the re-filing with the SEC of the company’s registration statement in relation to the public offering by the company,” the company said in a disclosure to the Philippine Stock Exchange (PSE) on Tuesday.

LBC will offer up to 69.10 million common shares, consisting of 10 million new common shares to be issued and offered by the company by way of a primary offer, and of 59.10 million existing common shares to be offered by selling shareholders pursuant to a secondary offer.

The indicative offer price for the follow-on offering is up to P22 per share, which means LBC could raise as much as P1.5 billion.

“The company expects to use the net proceeds from the offering for general corporate purposes and working capital, including the expansion of retail and corporate business, information technology development, and other corporate purposes,” the logistics company added.

Philippine Commercial Capital, Inc. is the lead underwriter and issue manager for the follow-on offering.

However, LBC would still need to secure the approval of the SEC and the Philippine Stock Exchange, Inc.

Last month, the PSE thumbed down LBC’s application for a follow-on offering, due to the pending cases filed by the Philippine Depository Insurance Corp. (PDIC) against its owners.

The Araneta-led logistics company said the PSE has advised that its listing applications have been rejected “based on the suitability issue affecting the company, which arises from the ongoing civil case filed by the PDIC against LBC Express, LBC Development, LBC Properties, and certain members of the Araneta Family.”

In 2016, the PDIC filed before the Department of Justice complaints against the officials of shuttered LBC Development Bank, Inc. for estafa, and violation of the PDIC Charter or Republic Act No. 3591 by conducting business in an “unsafe and unsound manner” that caused the bank to lose at least P1.8 billion.

The PSE also cited the SEC’s earlier decision to junk the registration statement filed by LBC Express in relation to its follow-on offering.

However, LBC insisted then that the PDIC case should not affect its suitability to conduct the share sale.

Shares in LBC were down by 16 centavos or 1.03% to close at P15.34 apiece on Tuesday. — Imee Charlee C. Delavin

ABOITIZ POWER Corp. (AboitizPower) on Tuesday said its subsidiary had signed a “compromise agreement” to allow its foreign partner to exit from their 59-megawatt (MW) solar power generation project in San Carlos City, Negros Occidental.

In a disclosure to the stock exchange, AboitizPower said its unit AboitizPower International Pte. Ltd. (AP International) forged the deal with SunE Solar B.V., the parent firm of Sunedison Philippines Helios B.V.

Sunedison Philippines and Aboitiz Renewables, Inc. jointly built the project under the company San Carlos Sun Power, Inc. (Sacasun). Aboitiz Renewables is a wholly owned subsidiary of AboitizPower and an affiliate of AP International. Sunedison Philippines is a wholly owned subsidiary of SunE Solar.

“The compromise agreement between AP International and SunE Solar settles the joint venture issues and provides an exit for Sunedison Philippines in the Sacasun project. It will also enable AP International to acquire all the interests of SunE Solar in Sacasun and Maaraw Holdings San Carlos, Inc.,” said AboitizPower.

AboitizPower said Aboitiz Renewables has been sending notices of default dating to July 13, 2016 to its joint venture partner in the project.

Based on the agreement, AP International will acquire the entire issued and outstanding shares of SunE Solar in Sunedison Philippines, the company said.

AboitizPower, which already owns 60% of Maaraw and Sacasun, through Aboitiz Renewables, will increase its ownership to 100%. The acquisition date was dated July 10, 2017.

It described Sunedison Philippines as “a company duly organized and existing under and by virtue of the laws of The Netherlands. It owns 40% equity interest in Maaraw and Sacasun.”

“The value of the transaction is based on the agreed enterprise value of Sacasun and Maaraw, net of the amount incurred by [Aboitiz Renewables] for the acquisition of Sacasun’s loan from BDO Unibank, Inc.,” it said.

AboitizPower was referring to Aboitiz Renewables’ acquisition of the nearly P2.9-billion loan of solar power project. Sacasun secured the loan to fund the solar farm project.

The share purchase agreement is subject to the approval by the Philippine Competition Commission as well as approvals of the creditors of SunEdison, Inc., an affiliate of SunE Solar and Sunedison Philippines.

On Tuesday, shares in AboitizPower slipped by 0.37% to close at P40 each. — Victor V. Saulon

THE ASCOTT Ltd. is aiming to attract not just corporate clients but also millennial travelers as it opens Citadines Millennium Ortigas, the international serviced operator’s new property that was developed in partnership with CDC Holdings, Inc.

“The millennial market is very strong… We’re banking on a 30-40% millennial market, that why we have this kind of look, it fits the bill on our clients. The remainder 30-40% will be for the corporate segment. We want to make sure that we have that balance,” Ascott Director for Sales and Marketing Casey V. Faylona told reporters during the soft opening of the property in Pasig on Tuesday.

The 32-floor tower offers 293 serviced residences under the Citadines brand of the Ascott, 96 residential units, and 11 commercial spaces for lease across 32 floors. With its soft opening, 90 units are now open to the public, while the rest will be available by September.

Units in Citadines Millennium range from studio, one-bedroom, two-bedroom, and three-bedroom, with sizes ranging from 35 to 140 square meters, located from the 4^th to 24^th floors. The 25^th to 29^th floors will be exclusive for residential spaces, which will have a separate entrance and lobby to ensure the privacy of the occupants.

The rest of the floors will be dedicated for amenities, which include a residents’ lounge, a fitness gym, and a lap pool.

While serviced residences usually attract clients who stay longer than a month, Citadines Millennium is also looking to capitalize on the rising popularity of “staycations.”

“It’s not always on a long-term basis, but we have to look on a bigger perspective. Everyone is very much welcome… people now love to stay in hotels, do staycations, we’d love to have that more,” Mr. Faylona said.

The Ascott is further banking on the presence of the Asian Development Bank’s main office and big companies such as San Miguel Corp. within the vicinity of the Citadines Millennium to attract corporate clients.

Citadines Millenium marks The Ascott’s second partnership with CDC Holdings, the first being the Somerset Millennium Makati in Legaspi Village which started operating in 2000.

The Ascott is currently expanding to reach 25 properties by 2020. Its three brands include Ascott The Residence, Citadines Apart’Hotel, and Somerset Serviced Residences. Over the period, the company will also be introducing new parts catered to the younger generation, namely The Crest and Lyf. — Arra B. Francia

BANGKOK — Thai Union, one of the world’s largest seafood conglomerates, said Tuesday it will overhaul its fishing practices to protect against labor abuses and unsustainable trawling, a move hailed by Greenpeace as “huge progress.”

The Thai food giant — which owns major global brands such as Chicken of the Sea, John West and Petit Navire — has long been a bete noire to those campaigning against overfishing and abusive working conditions on boats.

But on Tuesday it released a joint statement with Greenpeace announcing a series of reforms that both said should encourage other seafood behemoths to follow suit.

“This marks huge progress for our oceans and marine life and for the rights of people working in the seafood industry,” Greenpeace International Executive Director Bunny McDiarmid said in the statement.

“Now is the time for other companies to step up, and show similar leadership.”

Among the commitments Thai Union has made is to cut the number of fish aggregating devices (FADs) it uses by 50% by 2020 and reduce longline fishing.

FADs, which float on the surface to attract fish, and longlines are effective ways of catching large hauls of lucrative fish like tuna.

But they often result in reams of other animals being caught, including endangered sharks and turtles.

The reforms will also target working conditions on board Thai Union boats and those of its suppliers including an extended moratorium on “transshipping.” — AFP

THE municipal council of La Trinidad, Benguet has given its approval to Aboitiz Power Corp.’s plan to expand its hydroelectric power plant facilities in the area to 19 megawatts (MW) by 2019, the company said on Tuesday.

The project, which is being carried out by AboitizPower subsidiary Hedcor, Inc., aims to increase the combined capacity of three cascading plants from 5.48 MW.

“Hedcor and the local government unit of La Trinidad signed on June 27 the Memorandum of Agreement to cover the project and the benefits for the locality,” AboitizPower said in a statement.

It previously said that the revamp of what Hedcor calls Bineng 1, Bineng 2 and Bineng 2b is projected to generate 42.7 million kilowatt-hours (kWh) more or a total generation of 62 million kWh annually.

“Since its entry in Benguet in 1986, Hedcor has sustained its growth momentum. Starting from the rehabilitation of four hydroelectric power plants owned by the City of Baguio, the company later on constructed its own generation facilities in the municipalities of La Trinidad, Sablan, Tuba, Bakun, and Itogon,” AboitizPower said.

AboitizPower also said that together with Hedcor, they are “strong partners in the socioeconomic development of the community.”

It noted the La Trinidad local government unit received last year about P77 million as its barangay and municipal share from the operation of the hydropower plants. It also said Hedcor’s business tax, real property tax and national wealth tax reached P67 million in 2016.

To date, AboitizPower said the municipality had received P13 million in corporate social responsibility projects.

“These projects include farm-to-market roads, school buildings, and loans to cooperatives involved in the cut flower business,” it said.

The Bineng facility is one of three run-of-river hydro power projects developed by Hedcor in Benguet. The power plants have combined capacity of 98 MW.

Together with partners, AboitizPower has a net sellable capacity of more than 1,200 MW from its renewable energy portfolio of geothermal, hydro, and solar power plants in different parts of the country.

“The company continues to grow its renewable portfolio with the construction of the 69-MW Manolo Fortich run-of-river hydro project in Bukidnon and the 8-MW Maris Canal hydro project in Isabela. Soon, it will commission its first biomass power plant through subsidiary Aseagas [Corp.] in Batangas,” it said. — Victor V. Saulon

RETAIL SALES of Ford vehicles in the Philippines rose 17% in June, the US automaker said on Tuesday.

In a statement, Ford Philippines said sales surged by an annual 17% to 3,273 vehicles in June, driven by robust demand for Everest, EcoSport and Ranger models.

The June performance helped Ford Philippines reach a record quarterly performance, with retail sales of 8,922 vehicles during the April to June period.

“The wide popularity and strong appeal of the Everest, EcoSport and Ranger are continuing to drive our sales momentum this year,” Lance Mosley, managing director of Ford Philippines, was quoted as saying in a statement.

Ford Philippines said sales of the Everest sports utility vehicle (SUV) jumped 8% to 1,139 vehicles in June, bringing total year-to-date sales to 5,768 vehicles.

On the other hand, the EcoSport compact SUV recorded a 15% rise in sales to 984 units in June. This pushed year-to-date EcoSport sales 20% higher to 5,225 vehicles.

Also in June, sales of the Ranger pickup truck surged 40% to 880 vehicles, lifting year-to-date sales up 16% to 4,596 vehicles.

The company’s North American-built models also saw strong demand. Sales of the Explorer SUV increased 57% to 137 units in June, pushing second quarter sales 47% higher to 353 vehicles.

The Mustang sports car saw sales of 69 vehicles in June, bringing quarterly sales to 124 vehicles.

Here’s a quick glance at how PSEi stocks fared on Tuesday, July 11, 2017.