Chelsea Logistics Corp. (CLC) signed a USD220-million bridge loan agreement with Bank of China Ltd. on May 18, as it works toward a bigger role in the country’s transportation and logistics industry and subsequently in the economy.
Bank of China granted the loan under the initial USD3-billion financing package it committed, during the state visit of President Rodrigo R. Duterte to China in October last year, to help sustain the Philippine economy’s growth.
“We look forward to investing more in the development of infrastructure and other strategically important industries in the Philippines to further unlock the potential of the economy,” Bank of China Country Head Deng Jun said.
CLC, the logistics arm of the Udenna Group, earmarked proceeds from the bridge loan for its acquisition of a substantial stake in publicly listed integrated transport solutions provider 2GO Group, Inc. through an affiliate.
“Efficient shipping and logistics are a key component to creating a globally competitive economy,” Mr. Deng said. “We believe that synergies between Udenna and 2GO will bring together a stronger and more efficient shipping and logistics industry for the country.”
CLC acquired the outstanding capital stock of Udenna Investments B.V. (UIBV) in March 2017. UIBV has economic interests in KGLI-NM Holdings, Inc., which in turn has direct ownership of Negros Navigation Co., Inc. — the controlling shareholder in 2GO.
“Our investment in 2GO aligns with our commitment to contributing to our economy’s growth story by facilitating more efficient trading within and outside the archipelago,” CLC Founder and Chairman Dennis A. Uy said.
CLC continues to expand organically and through other acquisitions to become the prime mover of goods and passengers in the Philippines. It looks to raise P8 billion from an initial public offering of shares.
The company has become the country’s largest shipping group since starting its business through Chelsea Shipping Corp. to support the operations of affiliate Phoenix Petroleum Philippines, Inc. in 2006.
“We thank Bank of China for supporting our ongoing efforts to widen our horizon, offer better shipping and help propel the Philippine economy to new heights,” Mr. Uy said.
CLC considers the loan agreement as a vote of confidence, by one of the world’s biggest financial institutions, on the soundness of its acquisition into 2GO and the strategic importance of shipping to the economic growth of an archipelago of more than 7,000 islands.
Bank of China has over a hundred-year old history and has built up an excellent brand image widely recognized within the industry.
In the last two years, Bank of China was ranked fourth among the Global 1000 Banks by the British magazine, The Banker. In 2016, the bank was designated again as a Global Systematically Important Bank, becoming the sole financial institution from emerging economies to be considered as such for six consecutive years.
As China’s most international and diversified bank, Bank of China provides a comprehensive range of financial services to customers across the Chinese mainland, Hong Kong, Macau, Taiwan and 50 countries and regions across six continents.
At present, Bank of China is the only global bank with presence in all 10 members of the Association of Southeast Asian Nations. It started operations in the Philippines in 2002, making the branch only one of the group’s more than 11,000 worldwide.
Chelsea Logistics Corp. (CLC) and Bank of China, Ltd. signed a loan agreement for $220 million at Makati Shangri-La Manila on May 18. In the photo are (from left to right) CLC President and Chief Executive Officer Chryss Alfonsus V. Damuy; CLC Vice-President for Finance Ignacia S. Braga IV; Bank of China – Manila Branch Managing Director Michael Angelo De La Cruz; Bank of China Country Head Deng Jun; CLC Founder and Chairman Dennis A. Uy; CLC Treasurer Cherylyn C. Uy; and Bank of China Relationship Managers Dennis Richard Teng and Don D. Capistrano.