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Chelsea set to sell CP or retail bonds to raise P7b

Chelsea Logistics Holdings Corp. plans to raise up to P7 billion from the debt market to fund acquisitions and expansions.

CLC vice president for finance Ignacia Braga IV said in an interview over the weekend the company was considering the issuance of retail bonds or commercial paper to raise fresh capital after the company recently cancelled plans to get P5 billion from the issuance of preferred shares.

Braga said the company tapped Ratings agency Credit Rating and Investors Services Philippines Inc. to conduct a rating on the company in preparation for the planned borrowing.

He said the size of the planned fund raising might increase after the company decided to start developing its property in C-5 and transform it into a warehouse complex. 

Braga said the company would spend P2.5 billion to develop the property.

CLC is also beefing up its container business after its recently acquired shipping firm Trans-Asia Shipping Lines Inc. and purchased two cargo freighter vessels.

CLC plans to acquire a property for the dry docking facilities that it wants to put up.

“We are now looking at additional capital expenditures related to our dry docking facilities. So we may have to increase the P5 billion should we find a property,” Braga said.

CLC in January obtained the nod of the Philippine Competition Commission over the planned acquisition of TASLI.

CLC received the PCC approval after committing to do a price monitoring of passenger and cargo rates, submit semi-annual reports on all trips of passenger and cargo services in the critical routes, explain all extraordinary rate increases in the critical routes, and maintain the service quality of passenger and cargo routes based on customer satisfaction index developed by a third party monitor.

The PCC in July voided CLC’s acquisition of TASLI for its failure to notify the antitrust body of the 2016 deal even though the size of the transaction fell under the compulsory notification threshold of P1 billion at that time.

The PCC, however, ruled that a notification should have been filed because TASLI, at the time of share acquisition, had gross assets of ₱1.1 billion, or a little over the threshold.

The PCC also imposed a P22.8-million fine on CLC and parent Udenna Corp. before reducing the penalty to P11.4 million.

Topics: Chelsea Logistics Holdings Corp. , retail bonds , commercial paper
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