A whopping P254 billion in debt by 2020 had the Udenna group of Davao City businessman Dennis Uy unloading its holdings, including those in the company’s crown jewels.
Uy’s empire, through the holding company Udenna Corporation, spans petroleum, telecommunications, logistics, real estate and gaming. These are investments often financed with significant debt.
In the aftermath of the Covid-19 pandemic, the conglomerate, which was among the most diversified with infusions in almost all economic sectors, was almost decimated.
Rapid expansion happened during the administration of former President Rodrigo Duterte, a close associate.
By 2020, Udenna’s liabilities reached P254 billion against assets of P310.34 billion, doubling its losses to P8.6 billion due to the Covid-19 pandemic.
In 2022, a major lender issued a foreclosure notice to Udenna’s subsidiary, Clark Global City Corp., for failing to pay $4 million in lease payments to Clark International Airport Corp. (CIAC).
This triggered concerns in the market about cross-default provisions in Uy’s loan agreements.
Outstanding loans are estimated at P70 billion and P80 billion, excluding DITO Telecom’s loans.
But the fact that banks continued to lend despite the high debt levels and missed payments, said the banker, suggested either confidence in Uy’s political backer or lax risk assessment.
Continued losses across DITO of P10 billion in the first quarter, PH Resorts of P4.213 billion in 2023, and Phoenix Petroleum’s inability to pay dividends indicate that debt levels may not have decreased significantly without corresponding revenue growth or asset sales.
In 2017, Udenna acquired property developer Global Gateway Development Corp. for P34.1 billion, partly financed by bank loans.
By 2022, missed lease payments led to a default notice, highlighting the risks of a high-leverage strategy. The project’s ambitious scope may have encouraged banks to lend despite red flags, possibly due to its alignment with government infrastructure goals.
Udenna unit PH Resorts Group secured a P3.1-billion bridge loan in 2018 for the Mactan, Cebu casino project. By 2023, Uy restructured this debt by selling and re-leasing the 12.5-hectare property, retaining an option to repurchase.
Third telco DITO’s massive financing, including those from Chinese banks, coincided with Duterte’s pivot toward China. While China Telecom’s involvement likely reassured lenders, the speed of loan approvals for a startup telco raised eyebrows, especially given Uy’s lack of telecom experience.
Combining the 2022 liability figure of P287.86 billion with DITO’s additional P221.95 billion loan in 2023, total liabilities could approach P500 billion or more before considering repayments, restructurings, or new borrowing. However, asset sales and debt rollovers likely reduced this figure.
A conservative estimate, factoring in partial debt reduction and no significant new loans, places Uy’s companies’ total debts in the range of P300 billion to P400 billion as of 2025, with DITO and Phoenix being the largest debtors.