Chelsea estimated to reap 7.4B windfall & 5.7B gain from 2GO divestment

Chelsea Logistics and Infrastructure Holdings (Chelsea) listed KGLI-NM Holdings as a 100% subsidiary in its 17-Q3 Filing. While 2GO Group reported KGLI-NM Holdings to be its top shareholder owning 867,239,109 shares equivalent to 34.68% of the company as of 31 December 2020.

The divestment of the 867,239,109 2GO shares at 8.50 a piece would translate to a windfall of 7.4 Billion Pesos.

In its third quarter 2020 financials, Chelsea carried the 2GO investment in its books at 1.7 Billion Pesos. The divestment of 2GO shares could give Chelsea a profit of 5.7 Billion Pesos before any goodwill write-offs.

The estimated 7.4 Billion windfall will give a boost to the balance sheet of Chelsea especially that as of 30 September 2020 total current liabilities of Chelsea exceeds by 15 Billion Pesos over its current assets. Of the total current liabilities of 20.4 Billion Pesos, 6.2 Billion Pesos are interest-bearing loans and borrowings becoming due. Another 1.2 Billion Pesos of redeemable preference shares is also becoming due in the near term.

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