Dennis Uy’s Udenna eyes ‘amicable resolution’ of Project Clark debt issues

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Udenna Corp., Davao-based businessman Dennis A. Uy, is set to settle debt issues related to his $6 billion Clark Global City project after receiving a foreclosure notice from a consortium of banks led by BDO Unibank Inc., the country’s largest lender.

On Saturday, Uy’s unlisted holding company confirmed a report by the Inquirer that it received a notice of default on July 22, adding that it disputes the findings.

Udenna said the notice of default was issued against subsidiary Clark Global City City Corp., which is developing the 177-hectare Clark Global City in the Clark Freeport area of ​​Pampanga.

Udenna, citing the notice of default, said it involved “continuing and irremediable instances of default” in connection with a long-term lease agreement between state-owned Clark International Airport Corp. (CIAC) and Global Gateway Development Corp. (GGDC).

GGDC holds the leasehold rights to the property complex. It was acquired by Clark Global City Corp. in 2017.

“GGDC and CIAC are working on an amicable resolution that will not result in any breach of the master lease agreement,” Udenna said in the statement.

In the meantime, the company said it had responded to the banks to “challenge their conclusion”, which triggered the declaration of default.

“In these circumstances, there has been, in effect, no event of default, or at the very least, no event of irremediable default, under the head lease agreement on the part of CGCC or GGDC,” said Udenna.

The issue concerned the failure of the Uy companies to make payments to CIAC. The Inquirer reported that the current debt stood at $4 million (225 million pesos), but banking sources also raised concerns about increased liabilities that could be triggered by so-called default provisions. cross.

Udenna’s liabilities at the end of 2020 stood at more than 254 billion pesos against total assets of 310.34 billion pesos, according to a regulatory filing.

Losses for the year more than doubled to 8.6 billion pesos given the slowdown in business caused by the COVID-19 pandemic.

A supporter of President Duterte’s campaign, Uy has set out to rapidly expand his business empire over the past six years, mostly through debt-financed acquisitions. BDO, which is part of SM Investments Corp. of the Sy family, was one of the largest lenders to Uy.

Towards the end of President Duterte’s term, Uy sold key assets. These include logistics company 2GO Group Inc. to SM Group last year and the Malampaya deepwater gas project to billionaire Enrique Razon Jr. last month.

Uy also sold stakes in its Cebu and Pampanga hotel-casino projects to Razon last May. Other Uy companies include listed companies Phoenix Petroleum Philippines, Chelsea Logistics and Infrastructure Holdings Corp. and DITO CME Holdings, which owns the group’s telecommunications business together with China Telecom.

Earlier this year, DITO CME said its telecommunications unit was in talks with Chinese and foreign banks to fund its network expansion.

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