Dennis Uy, chairman and president of Phoenix Petroleum Holdings, speaks during a Bloomberg round-table discussion in Manila, the Philippines, on March 5, 2018.
Veejay Villafranca/Bloomberg
Mobile phone carrier Dito Telecommunity and casino resort developer PH Resorts Group—both of which are subsidiaries of tycoon Dennis Uy’s Udenna—are in talks with creditors to extend the maturities of debts worth more than $900 million as both companies sink deeper into the red.
Dito Telecommunity is negotiating with Bank of China to roll over some $800 million worth of debts, while PH Resorts is seeking to further extend the tenure of a 6-billion-peso loan ($107 million) from China Banking Corp. which is partly owned by the family of late retail billionaire Henry Sy Sr., the companies said in their interim financial reports released this week. The maturity date of a separate $500 million from China Minsheng Banking Corp. has already been rolled over to May 2023, it added.
“We are confident that the bridge loan facilities will be renewed until such time that these loan availments are converted into our arranged long-term loans with the same creditor banks,” Joseph John Ong, chief financial officer of Dito Telecommunity parent Dito CME Holdings Corp, said in a statement on Tuesday.
Dito Telecommunity has been racking up debts as it accelerates the roll out of its wireless network to compete with dominant mobile carriers PLDT and Globe Telecom. While the company’s revenues increased 10-fold to 3 billion pesos in the first half, losses widened to 15.4 billion pesos from 3.8 billion amid rising expenses, it said.
PH Resorts, whose losses more than doubled to 333 million pesos in the first half, said its currently negotiating with creditors for the “deferral of principal and interest payments” while seeking to convert some its bridge financing into long-term project loans.
Enrique Razon, chief executive officer of Bloomberry Resorts, speaks during a Bloomberg Television interview at the Milken Institute Global Conference in Beverly Hills, California, on April 30, 2019.
Patrick T. Fallon/Bloomberg
The company is also tapping additional funding options including an investment from ports billionaire Enrique Razon Jr., whose Bloomberry Resorts—operator of the Solaire casino resort in Manila—agreed in May to invest in PH Resorts’ casino resort projects in the central Philippine island of Cebu and the former Clark Air Base, north of Manila. Bloomberry has already made a 1-billion-peso deposit to PH Resorts, pending the results of an ongoing due diligence review.
“Management believes that considering the progress of the steps undertaken to date, these financing and capital raising plans are feasible and will generate sufficient cashflows to enable the group to meet its obligations when they fall due and address the group’s liquidity requirements to support the operations and the completions of its projects,” PH Resorts said in a statement on Monday.
Uy—an ally of former President Rodrigo Duterte and the founder of Udenna, which also has interests in petroleum, oil and gas, shipping, logistics and real estate—borrowed heavily as his companies went on an investment spree after Duterte’s election in 2016, buying a controlling interest in the Malampaya gas project for about $1 billion over two tranches and partnering with China Telecom to build the country’s third mobile carrier in recent years.
As his business empire expanded, Udenna sank deeper into the red and the liabilities of the group topped 254 billion pesos ($4.6 billion) as of the end of 2020. Last month, creditors led by Sy family’s BDO Unibank served a default notice on one of Udenna’s companies days before debt payment was due. The conglomerate promptly settled a $4 million payment.
Amid mounting debts, Uy has been divesting some of his assets. Last month, Udenna finalized the sale of half of its stake in the Malampaya gas field to Razon’s Prime Infrastructure Capital for an undisclosed sum. In June 2021, Udenna sold shares in logistics firm 2GO Group Inc. to the Sy family’s SM Investments Corp. (SMIC) With a net worth of $810 million, Uy ranks No. 24 on the list of Philippines’ 50 Richest that was published last week.
Teresita Sy-Coson, vice chairman of SM Investments Corp., poses for a photograph following a Bloomberg Television interview at the Milken Institute Asia Summit in Singapore, on September 19, 2019.
Paul Miller/Bloomberg