Dennis Uy open to selling other stakes in companies

MANILA, Philippines — Davao-based businessman Dennis Uy is open to selling stakes in his other companies if he receives an offer that is attractive enough.

“We are always open for the right price and right reasons,” Uy told The STAR over the weekend when asked if he was willing to sell his investments in his different companies amid a difficult business environment brought about by the COVID-19 pandemic.

Last week, he sold his stake in the 2GO Group, ending a partnership with the Sy family sealed in 2017.

Uy’s shipping and logistics company Chelsea Logistics signed an agreement to sell its entire 31.73 percent stake in 2GO to SM Investments Corp. for P8.50 per share or P6.6 billion.

2GO reported a P1.04 billion net loss in the nine months ending September last year, while Chelsea incurred a net loss of P2.6 billion in the same period  as revenues of both firms plunged because of weak economic activity.

Chelsea incurred a net loss of P367.16 million from its 2GO stake during the nine-month period.

With the agreement, SMIC will increase its stake to majority from 30.49 percent.

Sources from Uy’s camp said the sale of his stake in 2GO was largely due to the fact that he had no control of the company and debts were piling up.

“This is his biggest single loss, but it improves his leverage because his debt was secured by his shares,” one source said.

Uy is also willing to have his stake in his flagship business Phoenix Petroleum diluted to 51 percent from 67 percent.

According to its 2019 annual report, Phoenix has total liabilities of P65 billion, of which P38 billion are interest-bearing loans and borrowings considered as current liabilities.

Several groups have expressed interest in Phoenix, sources said.

Last year, Uy’s Udenna also sold its 50 percent stake in LPG company South Pacific Inc. for at least P5 billion, sources said.

But Uy still has his own LPG business in Manila and in Vietnam which are growing fast.

The Udenna Group is in a wide array of businesses, boosted by an aggressive buying spree in recent years

Its portfolio includes distribution and retail of finished petroleum products, shipping and logistics, property development, education, food, gaming and tourism, infrastructure, gas-to-power, and most recently, telecommunications.