Uy's Udenna says open to 'partnerships' amid reported assets sale

MANILA, Philippines — Davao-based tycoon Dennis Uy, whose debt-backed empire expansion coincided with the rise to power of his friend Rodrigo Duterte, is reportedly planning to sell his top businesses to the highest bidder at a time a new administration is about to begin.

Citing two anonymous sources, Reuters reported on Thursday that Uy is looking to sell high-value assets, which include his controversial controlling stake in the Malampaya gas field and the Clark Global City, a subsidiary of Uy’s holding company Udenna Corp. that leases commercial land in a former American military base.

READ: Cusi, Dennis Uy sued for 'anomalies' in Malampaya share sale

Commenting on the news, Udenna said the return of investor confidence amid easing virus curbs stoked a “renewed interest in discussing several partnership and strategic alliance opportunities with the Group”. The company did not deny the details in the news report.

“The Group’s investment philosophy has always been and remains to be to maximize shareholder value through strong partnerships with strategic investors and maintain core assets that provide maximum synergies with the other companies within the UDENNA Group,” the company said in a statement on Friday.

Uy, 48, was a major campaign donor of Duterte, who ran and won by a landslide in 2016.

During Duterte’s six-year term, Uy borrowed money from creditors and bought up companies left and right to diversify his portfolio. His latest investment was in Dito Telecommunity Inc., the country’s third telco player that he co-owns with state enterprise China Telecom.

But his borrowing spree to fund his buying binge had raised concerns over his empire’s growing debts. Citing data from the Securities and Exchange Commission, Reuters reported that Udenna's total liabilities rose to P254 billion in 2020 from P171 billion in 2019.

Uy’s group was too leveraged when it faced a pandemic that tarnished the balance sheets of many of his businesses. The financial troubles prompted him to sell his controlling stake in shipper 2GO to the SM Group and some assets of Phoenix Petroleum in 2021.

Just recently, Uy sold some of his shares in his casino businesses in Cebu and Clark to ports and gaming tycoon Enrique Razon Jr., who Reuters said is emerging as the preferred buyer for the Malampaya and Clark Global City assets.

Reuters’ source said “an announcement looks imminent" as the deals have been in the works for "some months already".