MANILA, Philippines — Udenna Corp., the beleaguered holding company of Davao-based businessman Dennis Uy, said yesterday it had settled its debt to a consortium of banks led by BDO Unibank in relation to its project in Clark, Pampanga.
Udenna said the matter had been settled yesterday, July 25, prior to the mandated deadline of July 27, “and to the satisfaction of the majority lender and the consortium banks.”
Last July 22, Clark Global City Corp. (CGCC), a subsidiary of Udenna Corp. and an affiliate of PH Resorts Group Holdings Inc. (PHR) received a notice of declaration of default from a consortium of banks led by BDO Unibank.
The notice of declaration of default was issued on the grounds of “continuing and irremediable events of fault” in relation to the master lease agreement between Clark International Airport Corp. (CIAC) and Global Gateway Development Corp. (GGDC), a subsidiary of CGCC.
In a statement issued yesterday, however, Udenna, said there was no default.
“To be clear, CGCC or GGDC did not fail to make any interest or principal repayments with its debt to the consortium banks and thus, in contention, CGCC replied to the consortium banks to dispute the default conclusion and clarified that, under the circumstances, there has been, in fact, no Event of Default or, at the very least, no irremediable Event of Default, under the Master Lease Agreement on the part of CGCC or GGDC,” it said.
Udenna said GGDC’s liability to CIAC amounted to $4 million.
In separate disclosures to the Philippine Stock Exchange (PSE) yesterday, other listed companies owned by Uy such as PH Resorts Group Holdings, DITO CME Holdings Corp., Phoenix Petroleum Philippines Inc. and Chelsea Logistics and Infrastructure Holdings Corp., said the issue would have no effect on their respective businesses, financial condition, and operations.
Udenna’s debt has piled up due to its aggressive expansion which accelerated in 2017.
By the end of 2017, Udenna had investments in around 55 companies from less than half as of end-2015. Of the 55, at least 10 were incorporated or commenced operations in 2017.
The Udenna Group’s portfolio includes distribution and retail of finished petroleum products through Phoenix Petroleum; gaming and tourism through PH Resorts; telecommunications through DITO CME.
BDO, meanwhile, said its loan exposure to CGCC is secured and that a possible default would have no adverse effect on the country’s largest bank.
In a disclosure to the Philippine Stock Exchange (PSE), the listed bank owned by the Sy family, confirmed that it had issued a notice of default on CGCC in relation to its obligations under the lease agreement between CIAC and GGDC.
“The relevant obligations of CGCC to BDO are secured and a default will not have a material adverse effect on the financial condition and business of BDO,” the bank said.
The Uy-led company has assured BDO that it is in the process of updating its obligations to its lessor, CIAC) on or before the July 27 deadline.
Earlier, Bangko Sentral ng Pilipinas Governor Felipe Medalla said the regulator’s stress tests indicate that the Philippine banking sector has adequate capital even under difficult scenarios.
“The banking sector is quite strong,” Medalla said.
Medalla said the total exposure of BSP supervised financial institutions (BSFIs) to the Udenna Group accounts for 0.83 percent of the total loan portfolio and 0.45 percent of the total assets of Philippine banks. - Lawrence Agcaoili