Dennis Uy sets P5B for expansion even as empire bleeds
Love him or hate him, but Davao’s favorite son Dennis Uy is pushing a P5billion venture even as the coronavirus pandemic is sinking his Phoenix Petroleum into the black hole.
Uy’s Phoenix Petroleum yesterday reported a P215-million loss for the first quarter, even though the country only locked down in the second half of March. Earlier, the two bigger players, Petron and Pilipinas Shell, reported much higher losses for the same period, burning a P4.9 billion hole in tycoon Ramon Ang’s Petron pockets and a bigger P5.5 bilconsumer-facing lion hole for Shell chief executive Cesar Romero’s.
The second quarter results for the three are expected to be worse, given the continuing quarantine restrictions.
Despite the worsened operating environment, Phoenix Petroleum yesterday confirmed that it was setting aside P4.9 billion of “corporate funds” in three years to pursue the expansion of Duta Inc., its real property arm.
The new venture is being pushed despite another operating company of the Davao taipan, 2GO, the shipping and logistics venture with the SM Group, still taking in water, although at a slower rate. 2GO said it had managed to reduce the first quarter loss to P109 million from P369 million in the same quarter last year.
Even before the coronavirus pandemic hit Philippine shores, Phoenix Petroleum had already acknowledged that it had breached its financial covenant with BDO in relation to a P6-billion, seven-year loan that it obtained from the bank in 2017.
Phoenix Petroleum reported that it had already “received approval (from BDO) on the waiver of breach in the current ratio requirement, subject to the condition that such breach is remedied by June 30, 2020 to be tested on or before Aug. 31, 2020.”
“The company is committed to improving its financial position through the strengthening of its balance sheet and cash flow generation,” Phoenix said in a statement yesterday. “Despite the current headwinds and uncertainties, the company will continue repositioning its businesses to lead the company’s long-term growth sustainably.”
BDO, meanwhile, also announced yesterday that it was setting aside another P20 billion on top of the P2.1 billion that it had allocated in the first quarter for loan-loss provisions amid the expected delinquencies from corporate and individual borrowers.
Uy rolls the dice for hotel-casino venture
The casino industry may still be shuttered and may have to write off the rest of 2020, but Uy
that is not deterring Davao’s Dennis Uy from proceeding with the capital call for his PH Resorts Group Holdings.
Uy also announced yesterday that he would proceed with a pre-coronavirus plan to nearly double the authorized capital stock of PH Resorts to P15 billion from P8 billion.
The additional capital would come via “equity offering, private placement, or similar transaction,” with Uy accepting even “non-cash properties as payment for such subscription.”
PH Resorts, which reported a P266million loss year-to-date, plans to build two hotel-casino resorts in Clark and Lapu-Lapu at par or even glitzier than the glittering jewels of Macau and Las Vegas.
Money talks
• Delta will resume its daily flight between Manila and Seoul starting July 1, while United Airlines will not restart service to Manila until August, when the 14-day quarantine requirement for incoming travelers to the United States shall presumably have been lifted.
• Asia United Bank, where Bangko Sentral Governor Benjamin Diokno had served as board director before he was drafted into the Duterte Cabinet as budget secretary, looks like one of the few coronavirus-proofed banks, reporting an even higher first quarter earnings of P9.79 a share from P9.11 the previous year.
Heard through the grapevine
It could be due to editorial fatigue or changed market conditions, but the traditional opposition papers in the United States like Philippine News, Manila Mail, and Filipino Reporter have all but dropped their anti-Philippine government stance, an editorial slant that had given birth to and nourished the expatriate papers especially during the Marcos and Estrada years.
Even New York-based billionaire Loida Nicolas Lewis, before being locked down by coronavirus, was spending more time campaigning for Joe Biden than crossing swords with China and calling for divine intervention against you-know-who.