Cellular operator Dito Telecommunity and casino-resort developer PH Resorts Group — both subsidiaries of tycoon Dennis Uy’s Udenna — are in talks with creditors to extend the maturities of more than $900 million in debt, as both Businesses sink deeper into the red.
Dito Telecommunity is negotiating about $800 million worth of debt extension with Bank of China, while PH Resorts seeks to extend the term of a 6 billion peso ($107 million) loan from China Banking Corp ., which is partially owned by the family of the late retail billionaire Henry Sy Sr., the companies said in their interim reports released this week. The Maturity Date of Separate US$500 Million from China Minsheng Banking Corp. has already been pushed back to May 2023, she added.
“We are confident that the bridge loan facilities will be extended until these loan drawdowns are converted into our arranged long-term loans with the same creditor banks,” Joseph John Ong, chief financial officer of Dito Telecommunity’s parent company, Dito CME Holdings Corp, said in a statement on Tuesday.
Dito Telecommunity has racked up debt as it accelerates the rollout of its wireless network to compete with dominant wireless carriers PLDT and Globe Telecom. While the company’s first-half revenue grew 10-fold to 3 billion pesos, losses widened to 15.4 billion pesos from 3.8 billion due to rising expenses, it said.
PH Resorts, whose losses more than doubled to 333 million pesos in the first half, said it is currently negotiating with creditors to “defer principal and interest payments” while attempting to convert some of its bridge financing into long-term project loans.
The company is also exploring additional financing options, including an investment by Port billionaire Enrique Razon Jr., whose Bloomberry Resorts — operator of Manila’s Solaire Casino Resort — agreed in May in PH Resorts’ casino resort projects in the central Philippines Island invest Cebu and the former Clark Air Base, north of Manila. Bloomberry has already made a P1 billion deposit to PH Resorts pending the results of an ongoing due diligence review.
“Management believes that given the progress of the steps taken to date, these financing and capital raising plans are feasible and will generate sufficient cash flows to enable the Group to meet its obligations as they come due and to meet the Group’s liquidity needs to support operations cover and the completion of its projects,” PH Resorts said in a statement Monday.
Uy — an ally of former President Rodrigo Duterte and founder of Udenna, which also has interests in petroleum, oil and gas, shipping, logistics and real estate — borrowed heavily when his companies went on an investment spree after Duterte’s election in 2016 and bought a majority stake in the Malampaya gas project for about $1 billion over two tranches, and partnered with China Telecom to build the country’s third wireless operator in recent years.
As his business empire expanded, Udenna sank deeper into the red and the group’s liabilities totaled over 254 billion pesos ($4.6 billion) at the end of 2020. Last month, creditors led by the Sy family’s BDO Unibank issued a reminder to Udenna’s company days before the debt payment was due. The conglomerate promptly settled a $4 million payment.
Amid mounting debt, Uy has sold some of its assets. Last month, Udenna completed the sale of half its interest in the Malampaya gas field to Razon’s Prime Infrastructure Capital for an undisclosed sum. In June 2021, Udenna sold shares in logistics company 2GO Group Inc. to SM Investments Corp. (SMIC) of the Sy family. With a net worth of $810 million, Uy ranks 24th on the list of the 50 Richest in the Philippines released last week.