Dennis Uy’s Chelsea gets relief for its P3.7B loans under DBP’s special rescue program for ‘calamity-stricken’ clients | Bilyonaryo Business News
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Dennis Uy’s Chelsea gets relief for its P3.7B loans under DBP’s special rescue program for ‘calamity-stricken’ clients

The shipping and logistics firm of bilyonaryo Dennis Uy sought relief from the Development Bank of the Philippines for the P3.7 billion loans it borrowed from the state-owned bank since the start of the Duterte administration.

In its latest financial report, Chelsea Logistics & Infrastructure Holdings Corp. said it has “availed of the ‘DBP RESPONSE (Rehabilitation Support On Severe Events)’ program, wherein the borrower may defer its loan repayment of up to six months with the option for restructuring in case the borrower is not able to recover within six months.”

Chelsea said this was part of the “necessary steps” it took to soften the impact of the COVID-19 pandemic on its financial condition with total debts of P28.15 billion as of the first quarter, P17 billion of which are due this year.

Chelsea has already invoked the provisions of the two Bayanihan Acts that granted distressed companies 30-day and 60-day moratorium on their loan and interest payments last year. Chelsea has likewise negotiated with its lender for the refinancing, extension, or temporary relief of its loan obligations.

DBP accounted for more than a third of Chelsa’s total long-term loans of P10.354 billion as of March, Practically all of Chelsea’s DBP loans were granted during the Duterte administration:

* 15-year loans worth P300 million in 2015 and P306 million were used to purchase MV Pioneer and MV Reliance;

* P370 million 15-year loan in 2016 to finance the construction of MV St. Sariel and MV St. Camael;

* P575 million in 2018 to refinance its purchase of MV San Pedro Calungsod, MV San Lorenzo Ruiz Uno and MV St. Nicholas of Myra;

* P618 million laan in 2018 to bankroll its acquisition of MV Trans-Asia 16, MV Trans-Asia 17 and MV Trans-Asia 18; and

* P1.5 billion in 2018 for the acquisition of a second-hand oil/chemical tanker and a used floating dock.

MV Pioneer and MV Reliance are part of the 14-unit fleet of Batangas-based Starlite Ferries Inc., owned by Energy Secretary Al Cusi, which Chelsea acquired in 2017 using part of the P5.8 billion it raised from its initial public offering the same year.

Aside from DBP, the other major creditors of Chelsea are:

* China Banking Corp. (P2.954 billion)
* Philippine Business Bank (P1.7 billion)
* BDO Unibank (P739 million)
* Maga International Commercial Bank (P247.5 million)
* Robinsons Bank (P247.5 million)
* CTB Bank (P247.5 million)
* First Commercial Bank (P165 million)
* Asia United Bank (P127 million)
* Rizal Commercial Banking Corp. (P111.5 million)

Chelsea admitted that it broke part of its debt covenant with some of its lenders in 2019 and 2020, specifically higher debt-equity ratio, lower current ratio and lower debt service coverage ratio (DSCR).

The company assured its investors that it had already “requested for the waiver of these financial covenants and management is confident that such will be approved based on the preliminary discussions with the lender banks.”

Chelsea said it “has not received any written notice, as of the date of the issuance of the consolidated financial statements, that the loans are due and demandable, which is provided for in the loan documents as a basis to reclassify the loan to current.”

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