SEN. Sherwin Gatchalian raised a red flag Friday to caution the Duterte administration on Udenna Corporation’s acquisition of the stake of Shell Philippines Exploration B.V. in the Malampaya gas field in Palawan, noting the former’s tight financial bind.
In a statement, Gatchalian noted that the financial capacity of Udenna in acquiring SPEX is put into question over recent developments, referring to Udenna’s subsidiary PH Resorts Group Holdings Inc. which suspended its casino project in Clark due to debt and cash problems. “This is a red flag. Paano natin mapagkakatiwalaan ang kumpanyang lubog sa utang [How can we trust a company mired in debt]? First, the acquisition of Udenna Corp. unit of Chevron’s 45-percent stake in Malampaya was largely financed by loans. Now, Udenna wants to have the operating interests by acquiring Shell’s stake,” Gatchalian said.
The senator cited reports that PH Resort Group’s capital is P1.2 billion in deficit and its net liabilities have increased to over P7.2 billion as of June and that its biggest creditor, China Banking, gave Uy until September 14 to agree on a bailout of its P5.9-billion loans after three extensions.
The energy committee chief added: “Malampaya is no ordinary asset. We have to make sure that any transaction should go through a thorough review and due diligence by the government to assure the Filipino people that whoever is going to step in is highly qualified, competent, and can deliver electricity.”
He noted that Malampaya supplies close to about 26 percent of the power needs in Luzon or about 3.7 million households.
In a Senate hearing in July, Philippine National Oil Company-Exploration Corp. (PNOC-EC) president and CEO Rozzano Briguez reported that $375 million of the $565-million sale of Chevron to UC Malampaya Philippines Pte. Ltd., a unit of Udenna Corp., was done through loans from three major banks and the rest, $157 million, was sourced through the gas field’s “net entitlements,” while $33 million came from the buyer’s stock issuance.