Conglomerate SM Investments Corp. is taking control of 2GO Group Inc. by acquiring businessman Dennis Uy’s entire stake in the listed shipping and logistics company for P6.6 billion.
Chelsea Logistics and Infrastructure Holdings Corp., a company controlled by Uy, said in a disclosure to the stock exchange Friday it would sell its full 31.73-percent stake in 2GO to SM Investments at P8.50 per share.
The acquisition price of P8.50 represents a 12-percent discount to the stock’s closing price of P9.65 on Thursday.
Chelsea said it would use the proceeds from the sale to pay a loan obtained for the acquisition of the shares.
The transaction will increase SM Investments’ stake in 2GO to 62.22 percent from 30.29 percent.
SM Investments said in a separate disclosure it would conduct a tender offer to acquire all remaining stockholders of 2GO also at an price of P8.50 apiece in compliance with the Securities Regulation Code.
“With the divestment, Chelsea will not be impacted by 2GO losses, which will aid the company in recovering from the current COVID-19 pandemic,” Chelsea president and chief executive Chryss Alfonsus Damuy said.
“With our numerous group-wide initiatives currently being undertaken, we are confident that Chelsea will be best prepared and positioned to take advantage of the recovery of the industry as we move forward,” Damuy said.
Uy, through his holding company Udenna Corp., obtained $220-million loan from Bank of China in 2017 to fund the acquisition of 2GO.
2GO Group widened its net loss of P1.8 billion in 2020 from P892-million net loss in 2019 because of the reduced economic activities brought about by the COVID-19 pandemic.
Gross revenue also decreased 19 percent year-over-year. Travel revenue declined by 78 percent to P2.9 billion amid the quarantine-related travel restrictions which began in mid-March and persisted throughout the rest of 2020.
Freight revenue from shipping also declined 10 percent, while sales from logistics and other services declined 13 percent year-on-year.
The share price of 2GO climbed 4.5 percent Friday to close at P3.72, while the share price of SM Investments fell 2.9 percent to P9.58.50.
SM Investments of the Sy family reported a net income of P23.4 billion in 2020, down by 48 percent from P44.6 billion in 2019 as core banking, real estate and retail businesses took a big hit from the pandemic.
Consolidated revenues also declined by 21 percent last year to P394.2 billion from P502 billion in 2019. The banking and property businesses accounted for 55 percent and 33 percent of net income, while retail contributed 12 percent.