Chelsea’s listing timed with ‘bad weather’

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EMETERIO SD. PEREZ

CHELSEA Logistics Holdings Corp. (CLC) sold 546.593 million common shares to public investors in an initial public offering (IPO) – that is equivalent to 30 percent of the company’s outstanding shares, at P10.68 each. It listed the stock, along with 500 million common shares, which were only partially paid by the owners prior to listing on August 8 on the main board of the Philippine Stock Exchange (PSE).

In a filing, Chelsea reported having grossed P5.837 billion from the sale of primary shares, which were all sourced to the company’s authorized capital stock consisting of 2 billion common shares.

As the latest addition to PSE’s more than 300 listed stocks, CLC common shares were last traded on August 15 at an opening price of P9.51. The stock hit a high of P10.14, dropped to a low of P9.50 and closed the session even lower at P10.12. At these market prices, the biggest losers were the public investors who bought CLC shares at an IPO price of P10.68.

Data posted on the PSE website shows Chelsea hit a 30-day high of P11.22 on listing day but dropped to a low of P9.50 the following day in intra-trade before it ended at P10.04. One stockholder was lucky to have sold on listing day.


Chelsea reported 1.822 billion outstanding CLC common shares on the PSE website. Of the outstanding shares, Udenna Corp. held 1.275 billion shares, of which Dennis Uy and his wife Cherylyn C. Ong indirectly owned 775.385 million shares, or 42.557 percent, and 382.615 million shares, or 21 percent, respectively.

Dennis, the founder
As the majority stockholder, Udenna used to be Chelsea’s only stockholder with 1.275 billion CLC shares. Its holdings were diluted to 70 percent after the IPO. The rest of Chelsea’s outstanding common shares equivalent to 30 percent were credited to the public.

It could be assumed that included in Udenna’s holdings were 500 million CLC common shares, or 27.443 percent, but which had not been fully paid. Udenna paid its arrears in full immediately before it listed CLC shares on August 8.

In a disclosure, Chelsea attributed to the public the ownership of 30 percent of outstanding CLC common shares, or 546.593 million shares.

At age 49, Uy was identified in a PSE posting as the founder of Chelsea, which, as of Dec. 31, 2016, employed 959 workers, consisting of 746 crewmen and 213 office personnel. He said that as the group continues to grow, he expects the company to hire 190 workers more this year.

Of Chelsea’s present workforce, 430 were regular, 39 probationary, 192 contractual and 314 apprentices. As an employer, the company said it is compliant with the workers’ benefits law that requires workers’ membership with the Social Security System, Pag-Ibig Fund and Philhealth Corp.

As part of its corporate social responsibility, Chelsea spent for waste management in accordance with the government’s requirement in the following amounts: P74,714 in 2014; P993,274 in 2015; and P181,349 in 2016.

Insiders’ holdings
Chelsea also reported the individual holdings of insiders totaling 2,396,602 CLC common shares, or 0.132 percent.

The insiders and the number of shares they held are as follows: Ma. Henedina V. San Juan, assistant vice president and corporate secretary, 219,000 CLC shares; Ricky P. Victoria, vice president (AVP)-ship management, 152,000; Rodel V. Marqueses, finance comptroller, 169,000; Chryss Alfonsus V. Damuy, president and chief executive officer, 522,000;

Miguel Rene A. Dominguez, director, 200,000; Gener T. Mendoza, director, 20,001; Arthur Kenneth L. Sy, director, 1; Leandro E. Abarquez, compliance officer, 36,300; Eduardo A. Bangayan, director, 70,000; Daryl Eunika B. Maloles, investor relations officer, 26,000; Irwin M. Montano, VP-human resources, 82,000;

Athelle Beverly Diamond G. Feliciano, AVP- chartering and synergy functions, 78,300, of which she sold 29,300 shares at P10.98 each on August 8; Efren E. Uy, director, 270,000; Cherilyn C. Uy, treasurer, 382.615 million shares, or 21 percent, which she owned through Udenna; Ignacia S. Braga, VP-finance, 452,000; and Jesus S. Guevara 2nd, director, 100,000.

Due Diligencer’s take
It is up to public investors to read in full Chelsea’s disclosures filed on the PSE website and its postings also on its own website.

By surfing www.edge.pse.com.ph, the public will find mostly disclosures containing initial statements of ownerships held by insiders. They will find more informative filings at www.chelsealogistics.ph, which contains the financial statements audited by Punongbayan & Araullo-Grant Thornton.

The suggestion is meant to guide the public on where to find the disclosures. What they would possibly find on www.edge.pse.com.ph are incomplete filings that do not even include public ownership reports (POR) and the list of top 100 stockholders as of a given period.

In investing, the audited financial statements may not be very reliable in helping the public make investment decisions. Yet, they serve as the main investment guide into the companies that file them simultaneously with the SEC and the PSE. Without them, public investors would remain helpless, unlike the majority stockholders who control the board and have access to all company information.

However, should the public who trade on listed stocks have any question or questions about the financial entries in audited financial reports, they should call the attention of the external auditors concerned, not only of Chelsea but also of other listed companies.

Hopefully, the SEC would be more attentive to the public, who are mainly responsible for getting family-owned businesses listed. Does the fact that their shares are listed also make these stock corporations public? Just asking.

esdperez@gmail.com

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