Gatchalian red flags cash-strapped Udenna of Dennis Uy on buyingMalampaya shares

Gatchalian red flags cash-strapped Udenna of Dennis Uy on buying
Malampaya shares

By Ernie Reyes

MANILA — As the government reviews the financial capacity of Udenna Corporation
in acquiring the stake of Shell Philippines Exploration B.V. (SPEX) in
the Malampaya gas field, the acquiring company’s financial capacity is
put into question anew, Senator Win Gatchalian said.

In a statement, Gatchalian said that this was done after Udenna’s
subsidiary PH Resorts Group Holdings Inc. suspended its casino project
in Clark due to debt and cash problems.

“This is a red flag. Paano natin mapagkakatiwalaan ang kumpanyang
lubog sa utang? First, the acquisition of Udenna Corp. unit of
Chevron’s 45% stake in Malampaya was largely financed by loans. Now,
Udenna wants to have the operating interests by acquiring Shell’s
stake,” Gatchalian said.

“Malampaya is no ordinary asset. We have to make sure that any
transaction should go through a thorough review and due diligence by
the government to assure the Filipino people that whoever is going to
step in is highly qualified, competent, and can deliver electricity,”
he added.

Malampaya supplies close to about 26% of the power needs in Luzon or
about 3.7 million households.

In a Senate hearing last July, Philippine National Oil
Company-Exploration Corp. (PNOC-EC) president and chief executive
officer Rozzano Briguez told the committee that $375 million of the
$565 million sale of Chevron to UC Malampaya Philippines Pte. Ltd., a
unit of Udenna Corp., was done through loans from three major banks
and the remaining amount of $157 million was sourced through the gas
field’s “net entitlements” while $33 million came from the buyer’s
stock issuance.

PNOC-EC holds 10% in the Malampaya project.

Last May, Shell Petroleum NV signed an agreement with Malampaya Energy
XP Pte Ltd., a subsidiary of Udenna Corp., for the sale of its 100%
shareholding in SPEX.

Reports said that foreign banks will finance Uy’s acquisition of SPEX
which are allegedly the same set of lenders in Udenna’s takeover of
Chevron stake worth $565 million that was closed in March 2020.

Reports also said that PH Resort Group’s capital is P1.2 billion in
deficit and its net liabilities have increased to over P7.2 billion as
of June and that its biggest creditor, China Banking, gave Uy until
September 14 to agree on a bailout of its P5.9 billion loans after
three extensions. (ai/mtvn)

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