After 2GO, Dennis Uy to sell Phoenix Petroleum assets to pay debt
MANILA, Philippines — Dennis Uy-led Phoenix Petroleum Philippines Inc. is on a hunt for companies willing to buy some or rent some of its assets to raise funds for debt falling due.
In a disclosure to the stock exchange on Tuesday, the country’s largest independent oil firm said its board had approved plans to “transfer, sale, mortgage” or dispose “certain corporate properties, assets and investments” to willing companies.
Apart from a general condition that any sale or disposal would be backed by “acceptable terms,” no information has been provided as to what assets or investments would be first out in case some entities come forward.
In turn, cash to be raised from these efforts will be used as part of Phoenix’s “financial management program,” including “debt management and funding activities.” No other information was released.
Phoenix has yet to release its full 2020 earnings report, but from January to September last year, the company posted a net loss of P95.45 million, a reversal of previous year's P918.3 million profits. Financial results further showed that in 2019, three-quarters of its outstanding debt or P38.3 billion are due in the short-term.
The announcement from the oil player came after an Inquirer report last month that said Uy, the Davao-based tycoon also behind the third telco player Dito Telecommunity Corp., was said open to selling all or part of Phoenix to an investor. There has been no development on that front to date.
While the pandemic has hurt businesses, the impact appears to have been more felt by Dennis Uy and his fast-growing business empire under President Rodrigo Duterte's administration. In early days of last year, Dito Telecommunity suffered a setback on its rollout plan, before catching up later on to its commercial rollout this month.
Last week, Uy sold his 31.73% stake in the 2GO group to Sy-led SM Investments Corp. for P6.6 billion. The logistics company has been in the red since 2017, failing to capitalize on the booming delivery sector amid the pandemic.
Shares at Phoenix traded at P11.50 apiece on Tuesday’s close, down 2.38% after announcing its unloading plan.
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