Udenna Corporation, the Philippines conglomerate owned by businessman Dennis Uy and whose assets include casino developments in Cebu and Clark, says it has settled a declaration of default with its banks.
Local media reported on Monday that Udenna had received a notice of declaration of default from a group of banks led by BDO Bank in relation to a business hub being developed in Clark by subsidiary Global Gateway Development Corp (GGDC). According to the Inquirer, Udenna had been given until today, Tuesday 26 July, to pay the Php225 million due or potentially spark a series of cross-defaults that could impact various loans across the business.
It has also been suggested that the rapid expansion of Uy’s businesses in recent years has been built on significant debt, forcing him to sell off some assets, including his controlling stake in shipper 2GO and some assets of Phoenix Petroleum in 2021.
It was also announced in May that Enrqiue Razon Jr’s Bloomberry Resorts Corp – owner and operator of Solaire Resort & Casino – had acquired shares in Udenna subsidiary PH Resorts Group, which is building casino resorts Emerald Bay in Cebu and The Base Resort Hotel and Casino in Clark. Razon is said to be on the verge of further investment in Udenna’s Clark projects.
However, Udenna said in a Monday statement that it has now settled the issue with its banks “prior to the mandated deadline and to the satisfaction of the majority lender and the consortium banks.”
“We would also like to clarify that the declaration of default was in relation to certain obligations of GGDC with [state-run] Clark International Airport Corp. (CIAC), which are due only on Wednesday 27 July 2022,” the company said.
“To be clear, GGDC 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, and clarified that, under the circumstances, there has been, in fact, no Event of Default or, at the very least, no irremediable Event of Default, under the Master Lease Agreement on the part of CGCC or GGDC. The financial liability stated was not a liability to the consortium banks, but an obligation of GGDC to CIAC, which, as stated above, has already been settled.
“We hope this clarifies this matter, and we appreciate the continued support provided by consortium banks to Udenna Corporation. We have always believed that they positively agree to our approach on this matter.”