Odina Dennis Oye opposes non-payment of debts
MANILA, Philippines – Entrepreneur Dennis A. Uy’s Udenna Corp. is moving in. in Davao to settle the debts of its $6 billion Clark Global City project after receiving a foreclosure notice from a group of banks led by BDO Unibank Inc. , the largest lender in the country.
On Saturday, the unlisted holding company Uy confirmed to the Inquirer Report that it had received a notice of default on July 22, adding that it was challenging the findings.
If the notice is formalized, it could trigger a series of defaults in the group’s other obligations to make it the largest default in the Philippine company’s history.
Udina said the default amount was issued against Clark Global City Corp. , which is developing Clark Global City with an area of 177 hectares in Clark Freeport District, Pampanga.
Udina, citing the default notice, said this involved “ongoing and irreparable default events” in connection with the long-term lease agreement between Clark International Airport Corp. (CIAC) and Global Gateway Development Corp. (GGDC).
Find a settlement
GGDC owns the lease rights to the property complex. Acquired by Clark Global City Corp. in 2017.
“GGDC and CIAC are working on an amicable resolution that will not lead to any breach under the master lease agreement,” Udina said in the statement.
Meanwhile, the company said it responded to the banks “to contest their conclusions” that led to the default announcement.
“Under the circumstances, there was, in fact, no default event or, at least, no irretrievable default event under the master lease agreement on the part of the CGCC or GGDC,” Udina said.
The problem included the failure of Uy companies to make payments to CIAC. The Enquirer reports that the current debt is $4m (£225m), but banking sources have also raised concerns about ballooning liabilities that could result from so-called provisions for default.
A regulatory filing showed that Udenna had liabilities at the end of 2020 of more than $254 billion against total assets of 310.34 billion pesos.
Losses doubled during the year to 8.6 billion pesos due to the business downturn caused by the arrival of the COVID-19 pandemic.
Delinquency provisions, a standard practice when structuring corporate loans, make one case of default by a borrower, no matter how large or small, a legal default on all of their other debts.
A default of this magnitude would be the largest through private borrowing in local history, dwarfing 2019’s non-performing loans for Subic-based Hanjin Shipyards at $412 million, or 23 billion pesos at the prevailing exchange rate.
Banking sources said Uy has until July 26 to respond favorably to the notice of the BDO, which leads a group of banks exposed to a debt-fuelled six-year corporate buying explosion.
An official with direct knowledge of the matter said the BDO’s intention to file the foreclosure notice was not to confiscate Uy’s assets, per se, but to force the businessman to come to the negotiating table.
“Foreclosure is not the preferred option,” the official said. “The situation can be addressed if they are willing to work with the banks.”
Banks move to announce Davao’s Dennis Oye defaults on Clark’s rental debt
Dennis Oye breaks silence on Malambaya deal and slams Biz Group
Comelec defends deal with Dennis Uy-linked F2 Logistics
read the following
SUBSCRIBE to INQUIRER PLUS to access The Philippine Daily Inquirer and other 70+ titles, share up to 5 widgets, listen to news, download as early as 4am and share articles on social media. Call 896 6000.