Chelsea Logistics swaps debt with shares issued to Metrobank, PERAA
Chelsea Logistics and Infrastructure Holdings Corp. has issued 77 million of its common shares to Ty-led Metropolitan Bank & Trust Company (Metrobank) as part of its debt conversion agreement with the bank.
Chelsea Corp. is the holding company of the shipping and logistics business segments of the Udenna Group of Companies, owned by Davaobased businessman Dennis Uy.
In a disclosure to the Philippine Stock Exchange (PSE), the logistics firm said its issuance was "pursuant to its subscription and debt conversion agreements executed with Metrobank and the members of the Board of Trustees of the Private Education Retirement Annuity Association (PERAA)."
A debt conversion agreement is when a debtor strikes a deal with an investor to convert its outstanding debt into shares of common stock.
The total of 77 million shares were sourced from its unissued capital stock in favor of Metrobank and PERAA Trustees.
The issued and outstanding common shares of Chelsea Corp. amounting to 2.27 billion shares include the partially-paid 375 million shares of Uy-owned Udenna Corporation, however they are "not yet recorded in the books of Chelsea Corp's Stock Transfer Agent," said the PSE.
According to its 2022 Annual Report, Chelsea's business recovery has been hampered by the effects of Covid-19 and rising fuel prices. This has prompted them to conduct a "Liability Management Exercise (LME) with bankers and other financial institutions for the refinancing or restructuring of existing debt, or deferring payment of debt service [in accordance with Republic Act (RA) No. 11469, Bayanihan to Heal as One
Act and RA No. 11494, Bayanihan to Recover as One Act in 2020 and 2021]."
Its short and long-term interestbearing loans and borrowings in 2022 totaled ₱17 billion, including ₱5 billion current loans and ₱12 billion non-current loans, as per the report.
"For those that qualify as significant loan modification, the Group recognized a gain on loan modification amounting to ₱134.4 million in 2022 and a loss on loan modification amounting to ₱86.6 million in 2020," the report stated.