Dennis Uy’s Chelsea seeks gov’t guarantee for P700M loan

Chelsea Logistics and Infrastructure Holdings Corporation, headed by Davao-based businessman Dennis Uy, has sought for a government guarantee for a P700-million loan to be used to buy a vessel.

In a disclosure to the local bourse on Monday, Chelsea confirmed that it has tapped the Philippine Guarantee Corporation (PGC) for a guarantee to secure its loan obligation intended to finance the acquisition of a vessel.

"Chelsea Logistics would like to state that it is working with PGC because the group may reach the single borrowers' limit with one of its financing bank, one of the main banks in the country which supports the shipping industry," the filing read.

"Thus, the group requires a guarantee to be provided by PGC in order to secure said loan obligation," the company said.

Chelsea is engaged in the shipping transport business through its wholly-owned subsidiaries Chelsea Shipping Corporation and Trans-Asia Shipping Lines Inc.

Uy was one of President Rodrigo Duterte's major backers during his presidential bid.

Meanwhile, PGC is a government agency that houses the merged Home Guarantee Corporation (HGC), Philippine Export-Import Credit Agency (PHILEXIM), Small business Corp., the Agricultural Guarantee Fund Pool, and the Industrial Guarantee and Loan Fund (IGFL).

"For this loan obligation for vessel acquisition, the group will actually execute a Chattel Mortgage over the subject vessel and thus the loan is fully secured. Hence, there is no exposure for PGC when it extends this guarantee to the group," said Chelsea.

"Also, it should be emphasized that the guarantee obtained from PGC is limited to the loan of approximately P700 million which will be used to finance a single vessel, and not to any other loan obligations of Chelsea Group," it added.

The company's statement was made in response to a column by Victor Agustin published on the Philippine Star, that reported on the application for guarantee.

"The Group will make sure that the interests of its shareholders are protected. No malicious misinformation will succeed and the Chelsea Group may seek legal action against such attacks, if necessary," said Chelsea.

Chelsea Logistics ended the first half of 2019 with a net income of P308 million, 14.7% lower than the P360 million reported the same period in 2018.

"Chelsea Group is capable of covering all its loan obligations supported by its strong EBITDA," it said. — BM, GMA News