Udenna Settles $4 Million Debt, Obligations of Other Subsidiaries Remain

On Monday, Dennis Uy’s Udenna Corp. was able to forestall a default after settling its debt with Clark International Airport Corp. (CIAC) and a BDO Unibank-led consortium of banks amounting to approximately $4 million. The company further affirmed that it was able to pay what it owed “prior to the mandated deadline.” The declaration of default was supposedly due on July 27.

Global Gateway Development Corp. (GGDC) — a subsidiary of Udenna affiliate Clark Global City Corp. (CGCC) — “did not fail to make any interest or principal repayments with its debt to the consortium banks, and thus, in contention, CGCC replied to the consortium banks to dispute the default conclusion,” Udenna noted.

This does not appear to be an isolated case for Uy-led companies. Phoenix Petroleum Philippines Inc., another subsidiary of Udenna, is also debt-ridden. The oil company has been unable to pay its bioethanol suppliers leading to an outstanding debt of around $12 million as of end-April. Some of the companies seeking payments include Universal Robina Corp (URC)-La Carlota and ProGreen AgriCorp.

Earlier in May, the Ethanol Producers Association of the Philippines (EPAP) wrote a letter to the Department of Energy-Oil Industry Management Bureau requesting assistance. “The bioethanol manufacturers would like to kindly bring the attention of the Bureau as regards the increasing uncollected payments from Phoenix Petroleum Philippines Inc,” the letter stated.

EPAP further requested for “the temporary exclusion” of Phoenix “from the local monthly allocation computation” beginning the fourth quarter of 2022. “This measure will ensure that the inventories of the bioethanol manufacturers will be allocated to other oil industry participants,” it added. The DOE sets local monthly allocations for oil companies. It then divides these allocations among local ethanol producers to reduce dependence on imported fuels.

Phoenix purchased bioethanol to comply with the mandatory 10% bioethanol blend for local gasoline under the Biofuels Act of 2006. When asked about the obligations, Udenna spokesperson and Phoenix senior vice president Atty. Raymond Zorrilla elaborated that “Debt is necessary in any business in order to expand and grow it. Just like any other company, Phoenix has its own liabilities that were incurred to fuel and propel its growth.”

Sources: CNN PH, PhilStar