Chelsea Logistics and Infrastructure Holdings Corporation issued a disclosure yesterday that indicated the purpose of their P700-million loan.
The group relayed that they will use the borrowed funding to pay for a vessel that they will employ in their shipping business.
For this loan obligation for acquiring a vessel, Chelsea pointed out that they will execute a chattel mortgage over the subject ship.
This fact makes the loan wholly secured, as per the company of businessman and diplomat Dennis Uy.
Chelsea affirmed that there is, therefore, zero exposure for the Philippine Guarantee Corporation (PGC) when it extends the government guarantee that the group is seeking.
Based on the news posted online by The Philippine Star, an English-language print and digital newspaper in the Philippines, Chelsea is after a government guarantee for a loan amounting to P700 million for financing the ship it will reportedly use for its shipping venture.
The listed logistics and shipping business of Uy revealed that the guarantee they received from the PGC is limited to the amount mentioned above.
Furthermore, the company pointed out that the borrowed funds will be used only to buy one ship and not to any other loan obligations of the company.
Chelsea can cover all of its loan obligations backed by its robust earnings before interest, tax, depreciation, and amortization (EBITDA), which is a measure of a company’s operating performance.
Two shipping subsidiaries belong to Chelsea. Trans-Asia Shipping Lines Incorporated is engaged in transporting cargo and passengers within high seas and territorial waters of the Philippines.
Meanwhile, the Chelsea Shipping Corporation (CSC) is engaged in the maritime trade in the conveyance of petroleum products.
However, the operation of CSC is not limited to general cargo handling, transporting, loading, and storing over waterways in the Philippines.
Finally, the Dito Telecommunity Corporation is the third telecommunications company, which is a group composed of Udenna Corporation of Uy, Chelsea, and state-owned China Telecom.
In the nine months to September 2019, Chelsea registered a net profit of P20 million, which indicates a plummet by 54 percent.
This figure is compared to the P43 million registered during the same period in 2018, owing to higher finance costs, depreciation, and amortization because of the logistics firm’s expansion program.
Alternatively, EBITDA rose by 52 percent to P2 billion as a result of higher depreciation and interest incurred from the operations of seven new vessels that started operations on various dates, beginning the fourth quarter 2018 to third quarter 2019.
As of the end of September 30 last year, Chelsea’s interest-bearing loans surged to P15.9 billion, resulting from the availing of new loans related to the acquisition of ships.
On Monday, February 17, 2020, Chelsea Logistics and Infrastructure Holdings Corporation (PSE: closed at P 4.45 per share.
This trading price marks an increase by 0.02, marking an increment of 0.45 percent. The value reached P 3,954,830.00.
The 52-week high of Chelsea is at 9.36. Meanwhile, Uy’s company’s 52-week low is at 4.41.
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