Udenna sells 25% stake in Phoenix Petroleum

Udenna Group has sold 25 percent stake in listed oil company Phoenix Petroleum Philippines Inc. to ES Consultancy Group for P4 billion to raise funds for the development of its casino-resort project in Mactan, Cebu.

In a disclosure to the Philippine Stock Exchange, Phoenix Petroleum said the PSE recently approved the special block sale transaction at the stock market between Udenna Corp. (UC) and Udenna Management & Resources Corp. (UMRC), both majority stockholders of the oil company, and ES Group.

UC and UMRC own more than 10 percent of Phoenix's capital stock.

In the disclosure, Phoenix Petroleum said UMRC sold a total of 264,841,348 shares, representing a 19.49 percent stake, at P12 each or a total of P3.17 billion.

On the other hand, Udenna Corp. sold a total of 75,429,610 shares of the oil company, representing a 5.55 percent stake, for P905.15 million.

The disclosure said that ES Group has acquired 25 percent of the outstanding capital stock of the Phoenix, which saw its net income grow by 11 percent to P283 million in the first quarter of 2017. In 2016, the oil company posted a 21 percent rise in net income to P1.09 billion.

"ES Group, a firm that focuses on financial strategy, corporate mergers and acquisitions, as well as joint ventures, will ensure the continued expansion of the Company not only in the domestic market but in the ASEAN region as well," Phoenix Petroleum said.

Phoenix shares were trading at P10.44 apiece as of noon yesterday.

Despite the sale transaction, Udenna said it maintains its control over the country’s biggest independent oil firm.

Proceeds of the share sale will be used to partially fund U den na' s $300-million Lapu-Lapu Leisure Mactan, deemed to be the first integrated resort and casino outside Metro Manila. The development will sit on a 12-hectare prime beachfront in the province of Cebu.

Recently, Philippine Amusement and Gaming Corp. (PAGCOR) CEOAndrea Domingo and Udenna CEO Dennis Uy signed a provisional license agreement for the Lapu-Lapu Leisure Mactan integrated casino-resort.

Uy group's wholly owned subsidiary Udenna Development Corp. (UDEVCO) will build the integrated resort and casino on a 12-hectare prime beachfront property in Punta Engaño in Mactan Island, Lapu-Lapu City, about six kilometers or a 20-minute drive from Mactan-Cebu International Airport.

Development of the project is eyed to start in three months and completion is targeted in 2022.

The Philippines is host to various gaming licensees operating in Entertainment City in Manila, the county's response to gaming hubs in Las Vegas, Macau and Singapore.

Belle, together with Melco, operated City of Dreams Manila while Bloomberry owns and operates Solaire Resort and Casino.

Looking ahead, growth in the gaming sector is seen to be driven by warmer ties with China, a big source of high rollers and wealthy gamblers, and rising foreign visitors. —