Malampaya confirmed that it had borrowed the entire $460 million purchase price for SPEX’s 45 percent stake in Malampaya from ING Bank, ANZ, Deutsche Bank, and Farallon Capitaland and declared that it could easily borrow more to fund its operation and expansion.
“The acquisition is supported by international reputable financial institutions who saw Malampaya Energy’s capability to meet its obligations and to deliver value. The capitalization of the company is only one element of a capital structure and is not on its own a reflection of the company’s ability to fund the deals. The acquisition of SPEX is 100 percent underwritten and funded via bank loans from our existing lenders. These full facility agreements have been provided to the relevant decision-makers,” said Malampaya Energy in a statement.
In a Senate energy committee hearing last week, Gatchalian raised doubts on Uy’S financial and technical capability to run Malampaya which supplied 30 percent of the country’s energy requirements.
Gatchalian said the Singapore-based Malampaya Energy had only $100 in paid-up capital which showed Uy’s lack of cash.
He also noted that Uy had racked up P120.8 billion in loans to expand his business empire in the first three years of the Duterte administration.
“Based on news reports and balance sheets that we’ve seen, (it) seems to me that Udenna (Uy’s holding firm) is encountering some financial challenges. And this doesn’t speak well on the purchase of a very important asset,” said Gatchalian.
With his purchase of SPEX’s stake, Uy has 90 percent control of Malampaya after he acquired Chevron’s 45 percent stake in the gas field in March 2020.
Gatchalian questioned why the Philippine National Oil Co., which had a right to match Uy’s offer price as it owned 10 percent of Malampaya, did not buy out Shell and Chevron when Uy did not even shell out a single centavo in his takeover.
Gatchalian said Uy would even use part of Malampaya’s cash to pay off the debts he incurred in buying out Shell and Chevron.
Malamaya Energy confirmed that the gas field was swimming in cash.
“Upon SPEX share sale completion, Malampaya Energy will have over P10 billion of cash. The Energy Committee has unfortunately looked at a very thin slice of information and it is Malampaya Energy’s responsibility to work with DOE and PNOC-EC to ensure all the facts are properly presented and the financing certainty and significant cash is known,” said Malampaya Energy which planned to conduct more drilling to find new reserves in Malampaya which would run dry by 2027.