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Dennis Uy restructuring: Chelsea gets P532M but its Dito stake shrinks to 6% from 25%

Chelsea Logistics and Infrastructure is getting a massive cash injection from the restructuring of bilyonaryo Dennis Uy’s telecom business.

But some market players are disappointed that Chelsea Logistics, the country’s biggest shipping and logistics firm also owned by Uy, had reduced its stake in Dito Telecommunity which would start commercial operations in four months.

In a report to the Philippine Stock Exchange, Chelsea revealed that its board approved the sale of 40.833 million common shares and 22.916 million preferred shares in Dito Telecommunity to Dito Holdings Corp. (DHC), which would consolidate all of Uy’s telco interests in one entity, on October 30. The sale generated P532.291 million in cash for Chelsea with the Dito Telecommunity shares sold for P12.474 for common and P1 for preferred.

Chelsea disclosed on November 3 that it would “continue to hold 25 percent of Dito Telecommunity Corporation albeit indirectly thru Dito Holdings Corporation.”

But when the deal was finally executed to November 11, Chelsea announced that its stake in Dito Telecommunity, indirectly held through DHC, to six percent.

Chelsea’s share in Dito Telecommunity was diluted after Udenna CME – which took control of the publicly-listed, shell company Dito CME in a backdoor deal on November 11 – subscribed to 7.379 million shares of DHC which increased its share in Dito Telecommunity from 34.8 percent to 53.4 percent. (Uy owns 60 percent of Dito Telecommunity through Chelsea and Udenna CME with China Telecom owning the remaining 40 percent).

Chelsea explained: “The transfer of the shares is Chelsea only for the purpose of restructuring Chelsea’s shareholdings in Dito Telecommunity, and to streamline the shareholdings of the corporation and of Udenna Corporation in Dito Telecommunity through a holding company, Dito Holdings Corp. Chelsea will continue to hold beneficial interest in Dito Telecommunity albeit indirectly.”

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