The Philippines’ biggest shipowner Udenna Corp has avoided any action by banks by making a debt payment related to an airport lease contract.
The Dennis Uy-owned group said it was not in default at any point after it handed over $4m to state-controlled Clark International Airport Corporation (CIAC).
Udenna said Uy’s Clark Global City Corporation (CGCC), CIAC and a consortium of banks led by BDO Unibank have “settled the matter” over debt owed under a lease agreement.
No terms were disclosed.
BDO has been Uy’s biggest financier for his acquisitions for the past six years.
Analysts viewed the $4m obligation as relatively small in corporate transaction terms.
But a default could have triggered cross-default provisions.
Analysts have pegged Udenna’s debt at between PHP 80bn ($1.4bn) and more than PHP 100bn.
Udenna said in a statement that the payment was due on 27 July.
The group did not fail to make any interest or principal repayments with its debt to the consortium banks, the group added.
Expansion, then sell-offs
Uy racked up debt expanding his business empire.
His major acquisitions include a $1bn deal to take over the Malampaya gas field from Shell and Chevron.
But the tycoon has been selling off some investments in recent months.
Uy’s shipping company Chelsea Logistics sold its stake in logistics and ferry company 2GO to SM in 2021, after buying it five years previously.
And in June, tycoon Enrique Razon Jr said he was buying Uy’s interest in the Malampaya consortium.
Stocks controlled by Uy had slumped on Monday as the news emerged.
Oil firm Phoenix Petroleum Philippines saw an 11% fall, while Chelsea Logistics lost as much as 16% before closing 12% lower.
“Investors are seeing a lower value for the stocks because of the risk this could spread to other companies within the group and affect its ability to raise financing,” Astro del Castillo, managing director at First Grade Finance, told Bloomberg.
Greek tanker deal
In 2020, Chelsea Logistics revealed more vessel acquisitions were on the cards as it confirmed a deal to bring in the country's biggest tanker.
The company bought the 52,000-dwt Chelsea Providence (ex Aritotelis, built 2013) from Evangelos Marinakis-backed Capital Product Partners (CPP).
Chelsea Logistics carried out a $116m IPO in Manila in 2019, before snapping up the 15-ship fleet of Starlite Ferries.
The group is listed with 12 tankers and two container ships currently.
