Udenna in the Philippines denies default as shares in units fall

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MANILA, July 25 (Reuters)Filipino conglomerate udennaCorp, detained by a close associate of former president Rodrigo Duterte, said on Monday he had received a formal notice from lenders, heavily sending shares of related companies down in the first exchanges.

DITO CME DITO.PS fell 9%, Chelsea Logistics C.PS sank 16%, Phoenix Petroleum PNX.PS fell 6% and PH Resorts PHR.PS fell as much as 7.5% in the first 30 minutes of trading. The expanded index .PSI fell 1.6%.

The four companies belong to Unlisted Udennawhich has continued a debt-fueled acquisition and expansion spree since 2016.

“There has been, in fact, no event of default or, at the very least, no event of irretrievable default,” Udenna said in a statement Monday.

The four listed companies were working to “immediately resolve” the case on Monday, ahead of a July 27 deadline to pay a $4 million liability, they said in separate statements to the exchange. “There should be no effect on the business, financial condition and operations,” they added.

Depending on existing loan terms, a default on one debt could mean a default on other liabilities.

Udenna chairman Dennis Uy, 48, was among the top donors to Duterte’s campaign. Uy oversaw the conglomerate which quadrupled its portfolio to more than 100 companies in the first four years of Duterte’s presidency, in sectors ranging from gaming, shipping, education and construction to fast food. , ferries, tourism, telecommunications and sports cars.

Uy has since sold some of the companies, including a majority stake in a gas field in the South China Sea, to reduce its debts.

Udenna’s total liabilities increased by nearly half to 254 billion pesos ($4.5 billion) in 2020, from 171 billion pesos in 2019, according to the latest available data from the corporate regulator.

($1 = 56.22 Philippine pesos)

(Reporting by Neil Jerome Morales editing by Ed Davies)

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